Question:

I would like to know what is the difference between what you call state government deficit and general government deficit? Is that all related to EU funds?

The question was asked in relation to the following story: New 2026 budget brings modest fiscal loosening, big changes to come in 2027

Answer:

The state government budget is a subset of the central government budget, excluding several government funds that are managed independently. Data is reported monthly on a cash basis, on the first working day after the reporting period, and a national methodology is used, though co-ordinated with Eurostat.

Meanwhile, the general government budget includes all public sector entities that do not operate on market terms, i.e. state-owned companies are excluded, for example. The most common division is central government (as noted above), local governments (any applicable levels, there are two in the Czech Republic - municipalities and regions), and social security funds. General government data is reported on an accrued basis, using the ESA2010 standard. Data is reported quarterly, along with national accounts (so at the end of the quarter following the reporting period).

As far as EU funds are concerned, they are entirely managed at state government level, so they are included in the state government budget.

The issue with EU funds is related to a mismatch between budget data reported on cash and accrued basis. In a nutshell, the previous Czech government made some advance payments on EU-funded projects, but the funds from the EU budget did not arrive before the end of 2025, causing a deficit related to EU flows. The usual approach in EU member states is that EU-related flows should be fiscally neutral, i.e. receipts should always match payments, and this is how budget laws are being written. Yet, since payments from the EU were delayed (the reason is not officially known), they do not figure in 2025 budget data, but will figure in 2026 budget reports. The January budget print already shows some extra flows, with more likely to come. Meanwhile, there is no change in budget data on accrued basis, which accounts for flows that are due, but not necessarily received in the calendar year. Thus, cash-based budget data shows a higher deficit in 2025 than accrued-basis data, due to a payment schedule mismatch.

Finally, EU rules state that payments not received in time from the EU budget cannot be carried over to next year's budget, which is why the new 2026 budget law (deliberations on which are about to start in parliament) will not include these additional cash flows.

Question:

My impression is that goods CPI does not include energy. Could you pls double check that goods CPI provided in the preliminary inflation print includes energy (as it is stated so in the article).

The question was asked in relation to the following story: CPI inflation eases to 1.6% y/y in January, as expected - flash

Answer:

Energy is indeed classified in the goods' category, and also includes fuels. You can see this mentioned explicitly in the description of the new flash CPI presentation which started with this release:

https://csu.gov.cz/changes-in-price-statistics-from-january-2026-onward

Specifically, there is a footnote about energy, which says "Includes automotive fuels (energy is classified in goods)."

Question:

Taxes and social contributions for the self-employed were projected to increase as per the draft 2026 budget presented by the last government, and the ANO had indicated that it was unlikely to support this increase. What is the status on this, please?

The question was asked in relation to the following story: New 2026 budget brings modest fiscal loosening, big changes to come in 2027

Answer:

The legislation is still being voted in parliament, but the ruling coalition has already proposed an amendment that blocks the increase. There is nothing about it in budget documents, however, and payments on behalf of self-employed are expected to rise slightly, by CZK 3bn. We reckon this is based on an expectation of higher taxable incomes (due to a strong GDP growth) and better tax collection, but the finance ministry doesn't specify that explicitly. It represents a downside risk on the revenue side.

We must add that the wording is precisely the same as in the original budget bill, only the numbers are different, so the legislative change might not have been reflected yet. In the past, the Czech Fiscal Council has criticised governments for incorporating tax changes that have not been passed by parliament into budget bills, so this could be the reason it has not been mentioned. It still looks like the finance ministry is betting on the economic cycle and better collection to make up for cancelling the increase.

Question:

If Orban loses, what do you expect his reaction function to be? Would you expect him to contest the result? Will there be a possibility to form a coalition?

The question was asked in relation to the following story: Majority of voters consider opposition leader Magyar suitable for PM - poll

Answer:

Our baseline scenario in case of a Fidesz and Orban loss is that they will remain as a normal opposition. We do not expect significant contesting of the results, unless the difference is very small like in the case of the Budapest mayor elections in 2024, in which the incumbent Gergely Karacsony won with a margin of just 41 votes after a recount. Orban recently signalled that Fidesz will continue to defend its policies either in power or in opposition, in our opinion indicating that he does envisage a scenario, in which Fidesz becomes the opposition. Orban would most likely wait for Tisza to make policy mistakes and would try to exploit the diversity of Tisza's voter base, in order to reduce the popularity of a Tisza's government and cause early elections, we would expect.

The possibility for a coalition very much depends on the final composition of the parliament, which is very uncertain at this point. The uncertainty comes from the fact that three parties are very close to the parliamentary threshold and it is not at all clear which ones will make it. Nationalist Our Homeland, liberal DK and the anti-status quo party MKKP are slightly above, at or just below the threshold, according to various polls. Most polls put MKKP below the threshold so it looks likely that it will remain outside the parliament. The situation with Our Homeland and DK is less clear-cut, since some polls put Our Homeland at or above the threshold and DK - below, while other polls show the reverse. In case no party has a parliamentary majority on its own after the elections, we believe that Fidesz has greater chance to cooperate with Our Homeland than Tisza. Conversely, Tisza has potential to reach cooperation agreement with DK, while coalition between Fidesz and DK is out of the question.

Question:

I recall that Poland's unemployment rate data comes out twice per month? Has it come out yet please?

The question was asked in relation to the following story: Retail sales accelerate to 4.0% y/y in December - Eurostat

Answer:

Yes, the Labour Ministry releases its early-month estimate and then GUS publishes the final data later in the month. The Labour Ministry hasn't published its estimate yet. But it does usually publish it around the 6th of each month and so perhaps it will still come out today, though perhaps also early next week.

Question:

I am looking at the data on monthly net flows between Poland and the EU, but when i go to the link, there is only annual data rather than months. I was hoping you could clarify how one tracks the monthly releases and how far back your series goes.

The question was asked in relation to the following story: Poland is net EUR 9mn payer with EU in May

Answer:

I am not really sure why the Finance Ministry presents its EU flow data like it does, but I agree it's quite annoying. Basically, one needs to remember to check the website once a month or the data is no longer presented since the FinMin only presents cumulative data and the last month and then at the end of the year presents only annual data. But I have been tracking this data for some time…and indeed have the core inflows and contributions and balance going way back to 2006. The data has changed over the years and so did my tracking of it. If you have any questions or need any clarifications, please ask.

The data is here.

Question:

What happened to this in the end? Will the excise taxes be fixed in 2026 in the end?

The question was asked in relation to the following story: FinMin says alcohol and sugar tax vetoes won't prompt 2026 budget changes

Answer:

There is no word about any fixing of the budget and I think the FinMin will just deal with the shortage, which isn't necessarily big at PLN 3bn or so. But it was known the president would likely veto these bills right from the beginning and so I have a feeling too that either the FinMin has created a reserve for this money or factored the fact that it wouldn't likely show up in the end. For political reasons, the FinMin wanted to underscore how the president's vetoes are undermining public finances even though the president slams the government for a high deficit.

As for inflation, the thing to keep in mind is that the previous Law and Justice (PiS) government passed a long-term hike to the excise tax for alcohol and it is still due to rise by 5% in 2026 according to that schedule. For comparison, the government wanted to raise it by 15%. The excise on alcohol has been rising by 5% for the past couple of years, and it looks like this usually ups prices by about 1% in January and February as companies digest the rest of the increase. There will thus be a very slight rise, though my calculations show 0.1pp or so.

The sugar levy wasn't supposed to rise, however, and so the lack of an increase will mean there is no inflation impact.

In terms of excise, however, there is also a 20% hike of the excise on cigarettes on Jan 1. That followed the 25% rise in 2025 that went into effect on Mar 1, 2025. There was a steady hike in tobacco inflation last year that started before the hikes went into effect and saw 2.1% m/m and 2.6% m/m in Jan and Feb to 1.0-1.9% m/m increases for most months. The increase in 2026 will thus likely be spread out, but looks likely to add some 0.2pp to inflation or so.

Question:

Which data series are these credit growth stats from? Is it from select performance indicators of credit institutions?

The question was asked in relation to the following story: Corporate lending accelerates to 11.6% y/y in Dec 2025

Answer:

We provide the data source for our stat stories in a link below the story. This specific report is based on the CBR regular monthly report "On the development of the banking sector", which can be seen here (in Russian only).

Questions:

(1) Can I ask when Mauricio Villamizar & Bibiana Taboada's terms on the Board end?

(2) I assume the next President [to take oath Aug 7, 2026] will be nominating replacements for them?

(3) Given the current sharp divisions on the Board, do you think this plays into their decision-making at all?

(4) If the election goes to the leftist candidate, what are the risks of further politicizing the Board, and what are the concerns about credibility?

The questions were asked in relation to the following story: BanRep's jumbo 100bp hike signals resolve, but also points to further tightening

Answer:

Under current rules, two members of the Board have been replaced every four years since 1997. Because Laura Moisá and César Giraldo were appointed in 2025 (replacing César Jaramillo and Roberto Steiner), the next scheduled change is expected to occur in January or February 2029. At that point, virtually all members could be replaced, as they would have completed at least one of the three permitted four-year terms (Villamizar and Taboada would have served two terms, Moisá and Giraldo one each, and Acosta under one and a half). [Note: for your reference, a few days ago we answered a question about the composition of the Board and the rules governing appointments here.]

However, at the time of Moisá and Giraldo's appointments, the Presidency stated that the sitting president may replace two board members at any time, regardless of tenure. This raises questions about the traditional procedure. Hence, a president seeking to reshape the Board before 2029 could challenge the appointment laws before the Council of State to expedite replacements, though such a legal battle would likely be lengthy and uncertain [so please take this with a grain of salt].

On politicization: a left-leaning government would likely aim to remove remnants of Uribismo and right-wing influence. In that context, they would seek to replace Taboada (daughter of a close ally of former president Uribe, whose lack of monetary policy credentials was questioned at the time of her appointment, underscoring that politicization risks are not exclusive to the left). They would also target Villamizar, the [mediatic] board member most opposed to the government's dovish stance, and Olga Acosta, who, despite being appointed by Petro, has often aligned with the Bank's technical staff and emerged as an unexpected swing vote.

A left-leaning administration aligned with the current one would likely seek to consolidate monetary policy to align with its interests, potentially undermining credibility by appointing members expected to vote in line with the Finance Ministry's position. A right-leaning government could pursue similar strategies, but the current situation, i.e., a president publicly attacking the central bank and seeking to interfere, is unprecedented.

Also note that the greatest risk to the fragile majority on the Board is an unexpected resignation, which has occurred before and could radically alter monetary policy [which we highlighted after the January 30 decision]. A resignation allows the President to appoint a replacement, regardless of whether the President has met his two-appointment quota.

Questions:

In Tuesday's Press Mood, you linked to an article in which President Petro said he would eliminate subsidies for diesel and coal.

At the same time, I read that diesel prices have been frozen. Can Petro's announcement be categorized as a political maneuver, or does it indicate actual fiscal consolidation?

Given that he said cargo transportation would be excluded, would this even be a meaningful economic sum?

The questions was asked in relation to the following story: Press Mood of the Day

Answer:

To assess whether President Gustavo Petro's announcement is primarily a political maneuver or a genuine fiscal consolidation effort, it is useful to begin with the regulatory framework and the current state of the Fuel Price Stabilization Fund (FEPC). Under Decree 1428 of 2025, the diesel subsidy for private, diplomatic, and official vehicles was eliminated, a move the government framed as a way to reduce economic distortions. Freight and passenger transport were excluded in order to avoid pass-through effects on the cost of living and to allow non-essential diesel prices to converge toward international levels.

Regarding diesel prices being frozen in February 2026 [note: after rising by nearly COP 99 in January], this occurs alongside a COP 500 reduction in gasoline prices, in a context where gasoline no longer receives subsidies but instead generates net contributions to the FEPC. It is worth noting that gasoline prices nearly doubled between 2020 and 2025, increasing from COP 9,000 to COP 16,500 per gallon.

Further, according to press commentary and expert opinions, the sustained appreciation of the COP against the USD since May 2025 and the decline in international prices have opened the door to a reduction toward COP 13,000 per gallon. At the same time, the diesel subsidy gap may have closed in January, leaving the subsidy below COP 1,000 per gallon. This distinction matters because diesel relies more heavily on domestic production, whereas gasoline consumption is estimated at 40% imported.

In the current context, COP appreciation and lower external prices have transformed the FEPC into a resource-accumulating fund, with an estimated positive balance of COP 0.4tn in the fourth quarter of 2025 (estimated by some leading energy experts and commentators in the country). This, in our view, has enabled a form of cross-subsidization in which the gasoline surplus partially finances diesel, avoiding a larger direct fiscal impact. However, lowering gasoline prices reduces the FEPC's saving capacity and puts upward pressure on diesel prices, which have stronger inflationary effects due to their impact on transportation and food costs. Thus, if gasoline is the main contributor to FEPC savings, then the remaining deficit is almost entirely explained by the ACPM subsidy.

Overall, against this backdrop, Petro's statement is clearly political [as the presidential races loom and Congress races are set for Mar 8] but also consistent with a current scenario of Brent prices around USD 65 and a nominal exchange rate below COP 3,800, which eases fiscal pressures and allows for the generation of surpluses. The reasonableness of assuming that these conditions will persist over a meaningful horizon is questionable, as we suggested in a related Q&A earlier this week. Moreover, excluding freight transport from the subsidy limits the immediate economic impact, but the outcome ultimately depends entirely on the stability of these financial variables. If Brent were to rise above USD 70, or if the COP were to depreciate, any projected surplus would be quickly erased, revealing that current consolidation depends on favorable market conditions rather than on a structural adjustment that addresses the cost of subsidizing freight transport, which remains the fund's main expenditure driver.

Questions:

The situation with Olga Acosta remains somewhat unclear to me. Because she joined midway through the common term (which ran from 2021 to 2025), I initially thought her original mandate would cover only the remaining two years of Alberto Carrasquilla's term.

(1) Is there a clear document or legal rule that specifies what happens when a new Board member is appointed outside the regular renewal window?

(2) Going forward, does this mean BanRep will always have at least one member whose term is staggered and replaced every two years (or on a different cycle from the main group)?

The questions were asked in relation to the following story: BanRep's 100bp rate hike masks fragile hawkish majority, rising governance risk

Answer:

Let us first outline the legal framework governing the appointment of the full-time members of BanRep's Board [our verbatim translation from Spanish to English].

Article 372 of the Constitution provides that the Governor of the central bank is elected by the Board and is a member of it. The remaining five full-time members are appointed by the President of the Republic for renewable four-year terms, with two of them to be replaced every four years.

Article 36 of Decree 2520 of 1993 further specifies that members of BanRep's Board, excluding the Finance Minister and the Governor, are appointed by the President for four-year terms, which begin on the date the first fully constituted Board is appointed [first note: that 'date' is not explicitly defined in the law]. To give effect to the partial renewal mandated by the Constitution, once the initial period has elapsed, the President must replace two Board members within the first month of each new four-year cycle. [second note: The law itself does not explicitly define those "periods," which requires some inference and complicates the analysis. Please see further ahead.]

In addition, Law 581 of 2000 establishes a mandatory gender quota for governing bodies, including BanRep's Board. This provision led to Alberto Carrasquilla's removal in December 2022 and paved the way for the appointment of Olga Acosta.

In practice, this framework implies that the President appoints board members to individual, renewable four-year terms, while the institutional design requires that two seats be renewed in each four-year cycle.

This was the case when Roberto Steiner and Jaime Jaramillo were replaced by Laura Moisá and César Giraldo. At that time, the Presidency publicly emphasized that, under the law, the head of state has the discretion to remove two of the five board members at any time, regardless of seniority. That language underscores political discretion over two seats, even though it is formally exercised within the framework of four-year terms and the partial-renewal mechanism set out in the Constitution and the decree.

Turning to your specific questions, the law does not expressly state that when someone replaces a Board member, they inherit or complete the remainder of the predecessor's term. It refers to four-year terms, as set forth in Decree 2520. In that context, it is reasonable in practice to treat Acosta's first term as running from 2023 to 2027, since her appointment in February 2023 effectively started an individual four-year clock.

Historically, changes in the Board's composition have been concentrated in specific four-year cycles (1997, 2001, 2005, 2009, 2013, 2017, 2021, and 2025), reinforcing the idea of four-year cycles with partial renewal during those periods. However, within that structure, the President can, in practice, replace up to two members per term, and repeated references to discretionary removal create a gray area about the exact timing at which a board member, such as Acosta, could be replaced.

This is where her position becomes particularly sensitive. Although her first four-year term would run through 2027 and the government already used the formal 2025 renewal window to replace two seats with Laura Moisá and César Giraldo, the President's public criticism in December has exposed Acosta to an unusual degree of political vulnerability. By asserting the authority to remove two members at any time, the Presidency creates a tension between the legal stability of her four-year term (2023-2027) and the Executive's political willingness to intervene in the Board's composition within that two-seat margin.

Overall, we would say the most prudent reading is that Acosta's first term runs from 2023 to 2027, but her position remains delicate because, even with the legal safeguards afforded by partial renewal, she is exposed to the Presidency's discretionary narrative. In fact, although the government has already used the 2025 window to change two seats, the new presidential term beginning in 2026 could rely on the same interpretation of discretion to seek additional changes ahead of the next clearly defined renewal window in 2029. It is thus reasonable to expect that there will occasionally be Board members whose mandates are "anchored" differently from the rest because they were appointed as replacements, even though the underlying legal design remains a four-year term with partial renewal of two members per cycle.

Questions:

(1) Regarding the current discussion about the FEPC (fuel stabilization fund) and the government reducing gasoline prices, could you explain in more detail how this stabilization fund works?

(2) With oil prices rising again and international gasoline prices following, I wonder whether the government will be able to lower prices without increasing its debt again?

The question was asked in relation to the following story: Press Mood of the Day

Answer:

Below is a high-level overview of the relevant concepts, based on the technical and legal documents from the Ministries of Finance and Mines & Energy (A, B, C) that we reviewed, as well as recent press reports (1, 2). Additional details on the justification for the gasoline price reduction will be released in the coming days, as announced by Finance Minister Germán Ávila during today's BanRep monetary policy press conference.

First, a paraphrased explanation of the regulatory framework and what is outlined in the technical documents:

- In Colombia, the final retail price of gasoline depends on the income received by the producer (the refiner), the transportation taxes charged to the wholesale distributor, and the surcharge applied by the retail distributor, who must also cover transport and distribution costs to stations or end customers. The "producer income" is the price refiners receive for selling a gallon of fuel to wholesalers in Colombia. This price, set monthly by the Mines and Energy Ministry, should approximate the international parity price, which is based on the Gulf Coast spot price, the nominal exchange rate, transportation and insurance costs, and the refining margin.

- The Fuel Price Stabilization Fund (FEPC) was established to reduce volatility in domestic fuel prices by saving or dis-saving resources across global price cycles. With its creation, direct fuel subsidies were formally eliminated, although in practice the FEPC has received fiscal transfers since 2022 to cover accumulated deficits [note: one of President Petro's strongest criticisms of his predecessor].

- If the producer income set by the Ministry is below (or above) the export parity price, the FEPC must cover (or collect) the difference to ensure domestic fuel supply. Similarly, if importers pay a price for a given product that exceeds the producer's income, the FEPC covers the resulting gap.

Second, according to recent press reports, the government aims to implement "an anti-inflationary measure by reducing gasoline prices starting Feb 1," taking advantage of the favorable conditions created by the COP's appreciation, which also supports fiscal sustainability given the recent dynamics of the FEPC. The logic is twofold: (1) Local prices have been higher than international prices since late 2025, and (2) the government announced that the gasoline-related FEPC debt, at record highs in 2022, was reduced to near zero by the end of 2025.

Third, regarding your question about the fiscal impact, here is a conceptual answer, given the numerous assumptions needed for a precise quantitative estimate at the present time:

As noted, the decision to lower gasoline prices represents an active use of the FEPC's recently improved balance as an immediate anti‑inflationary tool, as Minister Ávila framed it today. This temporary cushion largely reflects the sustained strength of the COP against the USD since May 2025, especially its acceleration in January, which has partially offset the recent rise in international oil prices by lowering refiners' opportunity cost in local currency. By cutting prices now, the government is essentially trading future fiscal protection for present price relief, making a dual macroeconomic bet: first, that the COP's appreciation will be sustained; and second, that upward pressure on crude prices will be temporary, consistent with the downward trend seen through 2025 despite notable volatility, and that its causes are related to weather issues deemed by market commentators as temporary.

If this bet fails, i.e., if the dollar strengthens (which we consider unlikely in the near term given gradual, ongoing FX market monetizations by the Finance Ministry, BanRep's surprise rate hike today likely supporting carry-trade dynamics between the COP and USD further ahead, and overall broad-based global USD weakness), or if oil prices remain high for longer, the FEPC's buffers would be depleted more quickly, and any future deficit would fall directly on the national budget, increasing fiscal pressure. Overall, this is not merely a price adjustment but a policy decision whose fiscal implications hinge critically on two volatile variables: the nominal exchange rate and oil prices.

Questions:

Does the Court's ruling just widen the fiscal deficit?

Or does it technically require President Gustavo Petro to cut spending within the already approved budget?

The questions were asked in relation to the following story: Constitutional Court provisionally freezes economic emergency and its tax decree

Answer:

From a legal standpoint, the Court's decision neither amends the budget nor mandates automatic spending cuts. Instead, it invalidates [temporarily] the primary source of additional revenues (the economic emergency). As a result, with the budget already approved, the government should, in principle, need to rely on Article 55 of the Organic Budget Statute to address the gap. This provision allows the executive, by decree, to suspend budget appropriations that lack financing until Congress makes a final decision:

"If the budget is approved without the enactment of the bill concerning the additional resources referred to in Article 347 of the Constitution, the government shall, by decree, suspend those appropriations that do not have financing, until a final decision is made by Congress."

Given that Congress blocked the tax reform in December 2025 and the Constitutional Court temporarily suspended the economic emergency and its associated tax package Thurs., Jan 29, 2026, evening, which largely mirrored the failed tax reform, Article 55 gives President Petro a legal mechanism to cut unfunded appropriations by decree, without having to return to Congress. It does not force automatic cuts, but it does provide an executive channel to suspend appropriations that are not financed under the already approved budget.

That said, Colombia's fiscal gap has widened due to a growing funding shortfall, as flagged by the Autonomous Committee of the Fiscal Rule, driven by stagnant revenue collection or modest growth relative to an expanding current expenditure. Under these conditions, spending cuts would be inevitable. However, the executive's preference has been to take on more debt, as evidenced by aggressive bond issuance since late last year, including the direct placement with PIMCO and the recent USD bond issuance.

Thus, in our view, there are three plausible scenarios going forward:

1. Cuts only (Article 55), with a medium to low probability, given that the country is in an electoral period and spending cuts are not the government's preferred option, particularly for an administration that defines itself as left-leaning.

2. More debt combined with selective cuts (Article 55). This is our base case. The government still has legal room to continue borrowing and would implement selective cuts at its discretion, especially given its persistent refusal to reduce current spending associated with the expansion of the state since President Petro took office.

3. A new tax reform. This is highly unlikely. Last year's failed tax reform was not the first to be rejected by Congress, and there is little appetite in the legislature to take up a new one.

In short, Petro could cut spending, but the government is unlikely to stop borrowing. The ruling points toward urgent cuts; in practice, in our view, reality looks somewhat different.

Put differently, the ruling by itself widens the deficit. To close it, the government must either raise revenues or cut spending; otherwise, it can only fund the larger gap with additional debt.

Question:

What do you think the expected economic impact of the mining shutdown will be on growth and government revenues?

The question was asked in relation to the following story: Govt suspends mining indefinitely, hits legal plants in Napo, El Oro, and Loja

Answer:

At this time, it is difficult to provide a clean estimate of the economic impact. Beyond uncertainty about the measure's duration, publicly available provincial production data are not sufficiently granular to model this specific shock accurately. Moreover, we assess that there is a high risk of a "substitution effect" that would mask any calculation: as legal channels close, activity is likely to shift to the informal sector. This means production would disappear from official statistics without necessarily vanishing from the ground, rendering standard economic modeling ineffective.

As noted in our story, the official documents do not clearly specify an operational mechanism to effectively curb illegal extraction; what is clear is the suspension order itself. As a result, the immediate effect in official statistics is likely to be reflected in the segment of regulated activity that will halt production to comply with the law (namely, legal mining operations and regulated artisanal miners). That being said, we do expect a significant impact across the supply chain, including commerce, transportation, and machinery, with knock‑on effects for local economies.

However, it is important to distinguish between the affected regions:

- Napo: According to reports by Prensa Latina, the Ecuadorian Chamber of Mining has confirmed that it has no affiliated companies operating in this province. Given that most mining activity in Napo is not captured in official statistics, the impact is likely to materialize primarily through second‑round effects on services that depend on informal mining.

- El Oro and Loja: The dynamics are different in these provinces. The shock is concentrated in the beneficiation plants. This will have a direct impact on local economies, as without these plants operating, small‑scale miners have no buyers for their material, disrupting the region's liquidity flows.

Question:

Do you have a table, article written by you or document that provides a table with the main budget numbers for 2025/26? Did Egypt publish the final FY 2024/25 Budget figures?

The question was asked in relation to the following story: Govt likely to delay Eurobond sale due to global uncertainty, volatile USD

Answer:

We cover the budget implementation regularly and we have that table in our articles. You can see our latest report here. Here is the same table, for your convenience. As you can see, it covers the main categories, but we can provide a much more detailed one upon request (the finance ministry publishes them here).

The 2024/25 final figures have not been published yet.

Question:

How much do UAE deposits account for as a share of total foreign-currency reserves?

The question was asked in relation to the following story: Net FX reserves rise 2.5% m/m to USD 51.5bn as of end-December

Answer:

The Arab countries (mainly Saudi Arabia, Kuwait, and UAE) have extended two types of deposits to Egypt's central bank - medium-term deposits, which are transparent, with clear maturity dates and interest payment schedules - and short-term deposits, which are more opaque. Both types of deposits are routinely rolled over. The UAE converted its USD 11bn medium-term deposit into a direct investment in the landmark Ras El Hikma deal from Feb 2024, and based on CBE's figures in its external sector reports, we estimate the UAE had a USD 5bn short-term deposit at the CBE as of June 2025. This figure is also mentioned in various news reports, so it seems credible. USD 5bn would account for about 10% of CBE's foreign reserves, and we think the deposit has remained at around this level.

Question:

Is the gold held in reserve (approximately USD 18bn) fully available to the CBE, or is any portion of it used as collateral?

The question was asked in relation to the following story: CPI inflation holds steady at 12.3% y/y in December, better than expected

Answer:

The gold reserves should be fully available to the central bank (CBE), because they are listed under Net International Reserves (NIR). According to the IMF's definition, Egypt's NIR are defined as the difference between gross reserve assets and foreign liabilities, and gross reserve assets exclude assets that are frozen, pledged, used as collateral, or otherwise encumbered. More importantly, the size of CBE's NIR under IMF's definition is pretty close to the value of NIR reported by the CBE, which suggests both institutions use the same definition, hence the reported gold reserves are not used as collateral. On the other hand, we could not find an official source that would suggest they are (or part of them is) used as collateral, but this is not always readily available information. To sum it up, we are confident the gold reserves are not used as collateral, but we are not 100% sure.

You can find more information about the net and gross FX reserves and the contingent external liabilities in CBE's latest monthly report (here), page 65.

Question:

Is there more recent data showing the stock of Egyptian bonds held by foreign investors?

The question was asked in relation to the following story: Non-resident holdings of T-bills and bonds

Answer:

Egypt's Balance of Payments has quarterly data for portfolio investments into bonds (a separate line in the Financial Account), so one can add them to the stock given by the IMF (~USD 4.2bn) and get some estimate for the stock as of end-September 2025. That flow was USD 700mn during Jan-Sep, which should increase the stock of bonds held by foreign investors to around USD 5.0bn as of end-September.

This is a rough estimate, but it may still be useful.

Question:

Has there been regulation recently to protect foreign reserves?

Answer:

Yes. Kuwait has implemented legislative changes to protect its foreign reserves, specifically the Future Generations Fund (FGF), which is Kuwait's flagship investment fund and makes investments outside Kuwait.

The most critical change was the passage of the New Public Debt Law in March 2025. We have written extensively about the new debt law and the situation before it. In short, before the debt law, the government could not borrow money and had to take money from the General Reserve Fund (GRF), the government's treasury managed by the Kuwait Investment Authority (KIA), the country's sovereign wealth fund.

The new debt law does three things:

• Sets a debt ceiling of KWD 30bn (USD 97.6bn), or about 60% of GDP.

• Allows the government to issue sovereign bonds and sukuk (Islamic bonds) with maturities of up to 50 years.

• Protects the FGF by giving the government an alternative way to finance deficits. Instead of liquidating long-term foreign assets at the KIA, the government can now turn to domestic and international debt markets.

Just days ago, in early February 2026, the Central Bank of Kuwait implemented new regulations. Specifically, the central bank lowered the maximum daily cash amount that exchange companies can accept from a customer to KWD 1,000 from KWD 3,000. Our understanding is that this regulatory move aims to curb suspicious cash movements and strengthen supervision over foreign currency transfers and remittances.

This is a direct response to global Anti-Money Laundering standards and aims to move more transactions into the digital, traceable banking system.

This is a deliberate move to align with Financial Action Task Force (FATF) standards. By forcing larger remittances and currency exchanges into the digital banking system, Kuwait is making it harder to move anonymous cash, thereby (theoretically) combatting money laundering and the financing of terrorism.

In Kuwait, exchange companies (also known as exchange houses) are non-bank financial institutions licensed and regulated by the central bank to provide specific banking-related services. Exchange companies are generally used for remittances and currency exchanges. In Kuwait, exchange companies are regulated by the central bank and must have a minimum capital of KWD 2mn and are authorized to perform international money transfers.

Question:

have u seen any breakdown of the external financing portion? 60 bn mad is ~ 6.5 bn usd which is a lot for morocco to do in eurobond market...i assume they are getting a decent chunk of that from sources other than eurobonds?

Answer:

hat I'm referring to is the plan for overall external funding given in the 2026 budget document, not necessarily Eurobonds, but also loans from commercial banks and IFIs. Morocco receives a solid share of its external funding each year from the World Bank and the AfDB. I haven't seen a more detailed breakdown of how this funding will be sourced, though. So far, its Eurobond issuance has been around USD 1bn a year with the largest issuance being in 2025 of around EUR 2bn.

The question was asked in relation to the following story: Govt weighs international bond sale in Q1 - Media24

Question:

Do you have the current allocation breakdown for pension funds and lifers? Presumably, if they are pushed more into equity holdings, there will be less support for the domestic bond market.

Answer:

The current breakdown of pension and life insurance funds' portfolios should be available here, but the financial watchdog's new data portal has not been working for some time:

https://data.ojk.go.id/SJKPublic

I'm sending the last available data from July 2025, which should be fairly representative in terms of the share of each asset type in their portfolios:

https://emergingmarketwatch.com/data/files/07.-Statistik-Dana-Pensiun-Juli-2025.xlsx

https://emergingmarketwatch.com/data/files/STATISTIK-ASURANSI-Juli-2025.xlsx

In summary, so far pension funds have invested about 6.1% of their portfolios into shares, but the rate varies depending on the type of pension fund, e.g. the Sharia pension funds have the lowest ratio at 1.6%, while the conventional ones have the highest at 12.2%. The ratio could be slightly higher if you also include some of the mutual funds, though there is no breakdown on the type of mutual funds that pension funds have bought into. Have a look at Table 4 for the allocation of the investment portfolios of the three types of pension funds and Table 7 for the net asset position. Unfortunately, it is in Indonesian, but the lines to look for are "Saham" for stocks and "Reksadana" for mutual funds.

As for life insurers, the share of their portfolios invested in stocks is significantly higher at about 22%. This is above the 8% threshold at present, but this should be due to phase-down periods from the previous cut (20% to 8%), which gave life insurance funds some time to adjust their portfolios.

As for the bond market, in theory, both pension funds and life insurance funds will have incentives to increase their equity holdings, which could lead to lower demand for government bonds.

The question was asked in relation to the following story: Govt to lift cap on pension funds, insurance companies equity investments

Question:

Is there data on the ratio of Mongolia's budget deficit to GDP for Jan-Sep 2025?

The question was asked in relation to the following story: General government budget posts MNT 542bn surplus in December

Answer:

Mongolia's GDP amounted to MNT 60.1tn in Jan-Sep GDP, whereas the respective budget deficit equaled MNT 1.3tn. This translates to about 2.2% of GDP.

Question:

What is the best indicator for domestic growth - as seems like there is still a healthy divergence between the overall economy and the domestic side.

The question was asked in relation to the following story: Exports increase by 33.9% y/y in January as semiconductor exports double

Answer:

I think the best indicators for domestic growth on the consumption side are retail sales and consumer sentiment. Retail sales rose by 1.2% y/y in December and by 0.5% y/y on average in 2025. On the other hand, the average monthly retail sales growth rate over the past 5 years is 0.6% y/y. Monthly consumer confidence, on the other hand, has improved tangibly in 2025 and reached an 8-year high of 112.3 in November before softening slightly in Dec-Jan.

There is also the service industry output statistics released by the stat office (link here) which tracks the overall performance of the service sector, not just retail sales. Services industry turnover rose by 1.9% y/y in 2025 compared to 1.1% in 2024 and 3.7% average growth over the past 5 years.

In terms of investment demand, I think the best indicator is equipment investment (link here) and construction completed (link here). Equipment investment rose by 1.7% in 2025 compared to 2.9% in 2024 and 2.6% on average in 2021-2025. At the same time, the construction sector was the main culprit for the lacklustre GDP growth in 2025, falling by -16.2% in 2025 compared to -4.7% in 2024 and -3.5% on average in 2021-2025.

Overall, Korean domestic demand has been not great, but also not terrible in 2025. Outside of the construction sector there have been several bright spots, most notably the strong improvement in consumer confidence. That said, structural factors such as population aging, US tariffs and weakening competitive edge over China, continue to weigh on growth. In my view, the strength of the domestic economy in the near future will mostly depend on policy stimulus and the recovery of the construction sector.