Question:

What is the effective interbank manat rate in Azerbaijan? Is it refinancing cost at 7% or within the interest rate corridor of 7-9%?

The question was asked in relation to the following story: CBA cuts policy rate by 25bpts to 7.00%

Answer:

The Azerbaijan Interbank Rate (AZIR) is a benchmark indicator calculated daily by the Central Bank oof Azerbaijan (CBAR). It represents the weighted average interest rate on unsecured, overnight manat‑denominated transactions between commercial banks. It is running at 7.13% as of Jul 25. Historical data can be found here: https://www.cbar.az/home?language=en, then click on "Money market" on the right hand-side of the page.

Question:

do u expect any more rate cuts by CBRA this year?

The question was asked in relation to the following story: CBA cuts policy rate by 25bpts to 7.00%

Answer:

As argued here, the cut was a surprise to me. I still believe there will be no more cuts this year.

Question:

Can you go through the methodology of Czechia's first release of GDP? Just so we can understand better which leading indicators could be used in a model to try forecasting the number.

The question was asked in relation to the following story: GDP growth stagnates at 2.4% y/y in Q2 - flash estimate

Answer:

This document of the Czech statistical office outlines the sources, data and procedures of GDP compilation used in the flash/preliminary GDP estimate; please see particularly Chapter 8 and 9.

For additional information on the econometric framework, please refer to the working paper of the Eurostat.

Question:

I know that must be difficult to know but can you estimate the size of this programme? Perhaps thinking on similar credit lines that were made available in the past?

The question was asked in relation to the following story: NBH to roll out new corporate loan programme to boost competition

Answer:

This programme does not entail loan disbursements by the central bank so it does not have a size per se. The essence of the programme is that the NBH "certifies" corporate loan products offered by banks by way of their usual operations. The certification practically introduces uniform standards for corporate lending and represents a kind of "approval stamp", serving to boost confidence by borrowers that they apply for the best possible terms. Loans to be disbursed under the programme will still depend on market supply and demand dynamics, the NBH does not provide any funds or subsidies to support the process, which is why it highlighted that the programme represented a market-based stimuli to lending activity.

Question:

Just more of a general budget question, but, how do they manage to revise GDP growth to the downside, fiscal deficit to the upside and keep the gross debt constant? Thinking about the shift from the beginning of the fiscal year.

Answer:

That is a valid question indeed. We would like to note that a similar discussion appears from time to time among Hungarian economic experts in the media, mostly arguing about the significant risk for the government's debt reduction plans to be missed. We have not managed to come across Nagy's presentation, on which he announced the latest GDP forecast downgrade, so we cannot track down the details on the government's fiscal projections. The 2025 budget was based on:

• economic growth forecast of 3.4%,
• GDP deflator of 4.0%,
• primary budget surplus of 0.1% of GDP under ESA terms or 0.8% of GDP deficit under the national cash-based methodology,
• EUR/HUF rate of 397.5

Out of these four factors, that have relevance for the government debt-to-GDP trajectory, we know that the GDP forecast was downgraded to 1.0%, but we do not know how the GDP deflator has been revised. It would be most likely revised up in line with the upward revision of consumer inflation. This could mean that the nominal GDP might not change much after all, effectively negating the impact from the downward revision of the GDP growth on the government debt-to-GDP ratio outlook. We also do not have perfect visibility on the update of the primary budget surplus outlook - Nagy said that the government expected 0.3% deficit this year, but it is not entirely clear whether he meant ESA terms or national methodology terms. We think he most likely referred to ESA terms, which does mean deterioration compared to the baseline scenario. There is no information also whether the government has updated its view on the forint exchange rate, but we think the original 397.5 forecast appears too optimistic at this stage, also meaning higher-than-expected upward revaluation effects on the government debt level.

Overall, at least two, but most likely three, of the four parameters have been negatively revised, very obviously putting a big question mark on the government's debt reduction target for this year.

Question:

Is it possible that EU negotiate again with Orban to unfreeze part of the blocked funds (as was done in 2023)? What about if Tisza wins Apr-2026 election, there would be enough time to request funds from the RRF facility or Cohesion Policy Funds (I've read that the former has a deadline for submissions at Aug-2026)? And more broadly how these EU funds affect the local FX markets? Local Treasury receives the euros and sells them at spot market? Or transfer them to Central Bank to avoid altering liquidity (accumulating reserves)?

The question was asked in relation to the following story: PM Orban indicates Apr 12, 2026 as parliamentary election date

Answer:

Yes, it's certainly possible to re-negotiate the EU funds suspension, Hungary will just need to meet the milestones set by the EU and receive a confirmation from the EC that the resolution has been satisfactory. You're right, calling the RRF funds is possible only up to Aug 2026 under the current rules, making it almost certain that Hungary will lose part of the funds even if Tisza wins next year's elections. The RRF funds are usually disbursed in tranches, depending on the implementation of interim benchmarks, so we doubt there will be sufficient time apart from possibly just the first tranche.

EU fund proceeds pass through the NBH and influence its external assets directly. No EU funds are sold on the spot market as far as we know.

Question:

How do you anticipate Orban's changes of defeating Tisza? Can he do a Turkey-style crackdown on him, i.e. by imprisoning him/revoking his parliamentary immunity?

The question was asked in relation to the following story: Expected Fidesz election result and possible pro-election policies

Answer:

As we indicated in the above article, we doubt that further fiscal stimuli by the government could lead to a turnaround in the economy. By extension, we consider it unlikely that such stimuli could also significantly alter the potential election result inasmuch as we think the weak economy is one of the main reasons for the voters' dissatisfaction with the government, compounding the wide perceptions for corruption.

Regarding a crackdown on the opposition, we consider this a very tail scenario, bordering on the improbable. In theory, it could be possible as Fidesz is known to have influence over the prosecution and the judiciary, and Orban has demonstrated tendency to shut down dissenting voices. In practice, however, the political culture is Hungary is much different than in Turkey and Orban just cannot allow himself such direct opposition repression as in Turkey, it would do him more harm than good. The most he can do is use slander against political opponents through government-friendly media, as an indirect way of dealing with opponents, a tool that has been in use for a long time but with limited effect, we assess.

Question:

This 80/106 is not in line with recent polling, is it? What do you expect potential Fidesz measures to be in the lead up to the elections? What would the market impact be for these measures if they are announced? Would they be expected to be announced in Q1/2026 or later this year in your view?

The question was asked in relation to the following story: PM Orban indicates Apr 12, 2026 as parliamentary election date

Answer:

Hungary has a dual election system - 93 MPs are elected from party lists, while the rest are elected out of individual candidates in each of the 106 constituencies. Poll results usually reflect better the voting on party lists, since they fail to capture the regional distribution of voters of any given party among constituencies. It is therefore hard to assess Orban's 4/5 claim, but we are inclined to believe that it is indeed biased in favour of Fidesz. Announcing more optimistic, rather than realistic, poll expectations would be a more logical strategy from Fidesz and Orban, or from any campaigning political party for that matter, we think.

In the 2022 elections, Fidesz won 54.13% of the list vote, giving it 48 seats, and it won in 87 of the 106 constituencies. The predicted Fidesz win in 80 constituencies in 2026 would still represent a weaker result than in 2022, which would be consistent with the current political trends, although the magnitude of the loss might be understated.

We see Hungary's economic troubles mainly in its heavy reliance on the electromobility industry, so we think that additional government measures would be ineffective in reviving GDP growth. Still, we do not rule out further populist measures from the government in the run-up to the elections, since we believe that Fidesz and Orban do realise that the weak economy is a significant factor behind the erosion of Fidesz' popularity. We expect such measures to be limited as the government already launched a number of pro-election steps, including the pensioner vouchers, the doubling of the family tax relief, the additional income tax exemptions to mothers, the price and margin restrictions, the new housing and career start-up loans, etc. Wage hikes in the public sector would be the most visible and effective pro-election tool, we think, so we consider this the most likely instrument for the government in the election campaign. The timing would be the usual in the beginning of 2026, which would provide a fresh stimuli shortly before the elections, in our view.

Wage hikes, or other pro-election measures, can be expected to have a negative impact on the budget. In this sense, the market reaction would depend on whether the related deterioration of the fiscal metrics is considered temporary and manageable. We think Hungary has relatively narrow room for further fiscal stimuli, so there could be a depreciating pressure on the forint as the most likely scenario.

Question:

Have you heard any reports about sustained Russian pressure on the CPC pipeline, in particular relating to possible FSB investigations?

Answer:

As outlined earlier, a recent decree signed by the Russian president introduced a halt on foreign oil tanker loading at Russia's ports. In addition, there is an associated requirement for the FSB to clear all foreign vessels. According to Kazakh industry sources, this stopped oil loading via the Yuzhnaya Ozereevka terminal (Novorossiysk) for 24 hours.

The terminal in question is a crucial part of the CPC infrastructure. Yet, industry sources were also quoted as saying that after those initial 24 hours, the FSB has been licensing tankers carrying Kazakh oil without fault. Kazakhstan's EnergyMin further released a statement to confirm uninterrupted loading via the CPC.

As a whole, Putin's decree is presumed to have come in response to the EU's most recent sanctions package as well as US threats against countries buying Russian oil. At this stage, there are no indications that the measure may have been aimed specifically at blackmailing Kazakhstan through the CPC.

Question:

Do you think we are seeing the impact of real TRY appreciation on goods imports?

The question was asked in relation to the following story: Domestic white goods sales rise by 12% y/y in June - TURKBESD

Answer:

It is challenging to attribute the situation solely to the appreciation of the lira, although it is certainly a contributing element. For instance, a decrease in demand from the US and EU, likely due to their economic slowdowns, also appeared to be a significant factor, in our view. Furthermore, escalating domestic costs mainly due to input-cost spiral driven by high electricity/gas tariffs as well as very high borrowing costs of the firms within the country might have played considerable roles in narrowing the price gap with competitors located mainly in East Asia, we think. To offer a case in point, Beko, a prominent Turkish white goods manufacturer, now has prices that are remarkably similar to its counterparts, such as LG and Samsung, on markets in CEE, according to personal observations. This is a notable shift from the pricing environment of just five years ago.

Question:

How much peso liquidity will this raise absorb? Was the BCRA remunerating reserves?

The question was asked in relation to the following story: BCRA raises reserve requirements on demand deposits to 40%

Answer:

For a ballpark figure, a quick back-of-the-envelope estimate would put the impact at no more than ARS 3tn. That said, this is a very low-confidence estimate and could be significantly off. The main issue is that we don't have access to the aggregate base to which the reserve requirement hike applies, and we also don't know how liquidity in the market will shift in response to the news.

The BCRA wasn't really paying reserve requirements. When we talk about remunerated reserve requirements, it is because banks are allowed to fulfill a share of their reserve requirements with a subset of Treasury bills.

The BCRA was remunerating other forms of liquidity, offering overnight or 7-day instruments. The central bank decided to eliminate all of its remunerated liabilities before mid-July though, which was a controversial decision. Before the expiration, the overnight instrument was paying a nominal annual 29.0% interest rate, which was a positive real rate if compared to expected inflation.

Question:

Can you clarify the latest status of US tariffs on Brazil. On July 31 the US admin unveiled a new Executive Order updating tariffs for multiple countries. In that order, Brazil is listed as facing 10% tariffs: https://www.whitehouse.gov/presidential-actions/2025/07/further-modifying-the-reciprocal-tariff-rates/ Does this mean all tariffs on Brazil have come down to 10%?

The question was asked in relation to the following story: Trump adds additional tariffs on Brazil, though there are some 700 exceptions

Answer:

The tariffs on Brazil remain at the 50% level, but they were divided into two executive orders. The base tariff is 10%, as set by the decree published Thursday, and a specific executive order published on Wednesday added an additional 40%, bringing the total to 50%. This specific regulation states: "The ad valorem duty imposed in Executive Order 14257 of April 2, 2025 (Regulating Imports With a Reciprocal Tariff To Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits), as amended, shall apply in addition to the ad valorem duty imposed in this order[…]".

However, we note that there are some significant exceptions to these tariffs, which are likely to reduce the overall impact on the Brazilian economy. The Ministry of Development, Industry, Commerce, and Services estimates that only around 36% of Brazilian exports to the US will be subject to the full 50% tariff, which we believe will ease pressure for an immediate response.

Question:

Have you seen a full breakdown of the budget anywhere? I can't find anything besides press statements.

The question was asked in relation to the following story: FinMin Chapman proposes USD 34.9bn 2026 budget

Answer:

Unfortunately, we do not have the full breakdown of the 2026 budget. It takes some time for the National Assembly and/or the Finance Ministry to publish the full document after the announcement. When the ministry publishes it, you can find it here.

We will let you know if we see it in the coming days.

Question:

Hi, can you confirm whether the JP Morgan loan has been repaid and what is left in the total amount of bank financing pre-approved? Can you also provide a breakdown of all the loans outstanding including amounts, currency, interest rate and any triggers?

The question was asked in relation to the following story: FinMin Chapman insists that fiscal deficit will be less than 4% in 2025

Answer:

We can confirm that JPMorgan Chase & CO loan has not been repaid by June-end, according to information published by the Finance Ministry's public financing department (here is the link). Regarding all loans, you can find further information here.

Question:

Do you have any information regarding Kuwait's potential debt issuance?

Answer:

We have written extensively about Kuwait's debt situation. Here are some of our recent articles, chronologically from newest to older.

Kuwait Stock Exchange to resume debt listings and trading

Kuwait is mobilizing banks for USD 6bn bond sale - Bloomberg

CBK and KIA to borrow domestically and globally

Government to borrow up to USD 19.6bn during current fiscal year

Decree sets USD 97.3bn debt ceiling with 50-year borrowing plan

Cabinet approves Public Debt Law, paving way for debt issuances

Here is our summary:

Kuwait is set to re-enter global and local debt markets in 2025 following the approval of a new public debt law in March. The New Public Debt Law authorizes Kuwait to borrow up to USD 98bn (KWD 30bn) with maturities stretching up to 50 years. That is the longest legal framework for public debt in the country's history.

The law sets a debt ceiling of around 60% of GDP.

Kuwait plans to issue sovereign bonds and Islamic Sukuk both in domestic and major foreign currencies. Initial issuances could total between USD 5bn to USD 20bn during the 2025-26 fiscal year. Kuwait's fiscal year begins on April 1 and ends on March 31 the next year.

Our understanding is that the debt issuance is intended to diversify funding sources, stabilize liquidity, and finance a large infrastructure program estimated at USD 42bn covering projects like new port facilities and airport expansion.

The debt issuance is part of Kuwait's broader Vision 2035 economic diversification and financial reform plan. This includes developing a sovereign yield curve, attracting global investors, and supporting sustainable fiscal management independent of changes in the price of oil.

We expect there will be strong demand for Kuwait bonds, thanks to the country's solid credit fundamentals and high sovereign wealth reserves.

Question:

Do you know how far below cost recovery fuel prices are currently, ie what size of further price rise would be required to remove the subsidy, all things equal?

Answer:

Current domestic prices for gasoline and diesel in Angola are approximately 60% and 62% of their respective market levels, assuming all other factors remain constant. I estimate target prices of AOA 500 for gasoline and AOA 646 for diesel, compared to the current levels of AOA 300 and AOA 400.

Despite being an oil produer, Angola imports most of its fuel, so global prices and the exchange rate are both critical variables when considering full fuel price liberalisation. I recommend this World Bank study on fuel subsidies in Angola, which provides more detail. Although the June 2023 adjustment reduced the gasoline subsidy from 63% of the market price in May to 39% in June, the sharp depreciation of the currency during that period caused the subsidy to rise again, reaching 65% by October.

The question was asked in relation to the following story: Police arrests 100 as taxi driver protest turns violent

Question:

Please provide revised GDP data for 2023 and 2024, as well as all general government debt data in 2023 and 2024.

The question was asked in relation to the following story: Link to the revised 2025 budget

Answer:

This is a somewhat moving target at the moment, but please see the table below. Within it:

• The GDP figures (quarterly) are the latest provided by the stats office (my series).
• The debt figures (quarterly) are the latest downloaded from the country's data portal.
• The data prior to Q4 2024 seems to have not been revised, so for reference we've also included the figures from the Court of Auditors report for 2022 and 2023.

Question:

Please provide link to the revised 2023 and 2024 budget.

The question was asked in relation to the following story: Link to the revised 2025 budget

Answer:

The revised 2024 budget can be downloaded via this link. There was no formal budget revision in 2023.

Question:

Please provide link to the revised 2025 budget.

The question was asked in relation to the following story: Data on local issuance in the supplementary budget

Answer:

The budget can be downloaded via this link.

Question:

From what I understand Uganda's gold industry is almost entirely artisanal despite significant reserves, and exports are considerably supplemented by smuggling from Kivu. Is this an accurate picture? And have there been any moves to formalise the sector or large FDI announcements into the sector?

Answer:

Yes, gold production is mostly from artisanal and small-scale miners, and it is considered a grey area as it is underregulated and there is little information on how much is really produced as small miners are believed to be underreporting their production. Some estimates have put local gold production of 2-3 tonnes, which is way below what export figures indicate. Last year's gold exports amounted to USD 3.38bn which suggests more than 40 tonnes of gold.

Most of the exported gold is processed in the country and the raw gold is imported from other countries, including DRC. For a comparison, the imported raw gold was about USD 3bn in 2024. However, these are just official figures, and it is suspected that a lot of gold from DRC, Sudan and South Sudan is smuggled through East African countries, including Uganda. Of course, how much is smuggled can only be guessed but some estimates put it in the billions of dollars.

The Ugandan government has not done much to stop this, and the sector is generally poorly regulated. There is no royalty on mined gold and the government only introduced an export levy in 2021 which was then reviewed due to the opposition from gold refiners which stopped importing and processing gold for some time. The issue was resolved in 2023 and gold trade resumed, but again, this is mostly imported raw gold which is refined and exported.

As for plans to develop local production, there were a few exploration projects announced, including a USD 50mn project by China's Wagagai Mining, and Busia and Mubende projects by Australia's eMetals. Wagagai was supposed to start production by December last year but there is no clarity if this has happened yet. The central bank has said it plans to launch a domestic gold purchase programme aimed at reducing gold imports and building up reserves. If done properly, like in Ghana, it can legalise and encourage small-scale mining, but nothing concrete has been outlined yet.

The question was asked in relation to the following story: CA gap shrinks by 38.5% y/y to USD 723mn in Q1

Question:

Is this [Kangaroo Bonds] part of [the government's] annual FX issuance plan, or an alternative to local IDR issuance?

Answer:

Since the government does not publish its annual forex issuance plan, it is difficult to determine whether the inaugural Kangaroo Bonds were part of its original borrowing strategy or are being issued in place of a local debt sale. We lean toward the latter, considering that the plan to raise funds in the Australian bond market was only floated in May this year - unlike the Global Sukuk programme, which was planned well ahead of the 2025 fiscal year.

It will be important to monitor local debt issuance in Q3, during which the government aims to raise IDR 252tn through auctions. Any shortfall in targeted issuance would suggest that proceeds from the Kangaroo Bonds (the size of which is yet to be revealed) are being used to finance the deficit. In case the issuance target in Q3 cannot be adjusted so quickly, the government might opt to issue less debt in Q4 instead. The matter could become clearer by September or so.

The question was asked in relation to the following story: FinMin confirms August issuance of first-ever Kangaroo bonds

Question:

On the rising cost of living point, inflation is at multi year lows?

Answer:

Correct, inflation came in at 1.1% y/y in June, the lowest since February 2021. Perhaps, the perception among some households that the cost of living is rising may reflect deteriorating inflation expectations, likely influenced by recent government policy measures, particularly subsidy reforms. Since 2023, subsidies for diesel, electricity, water, chicken, and eggs have been partially rolled back. The expansion of the Sales and Services Tax and the restructuring of electricity tariffs from July, which is expected to raise electricity bills for certain users, may also have negatively impacted public sentiment. In addition, inflation remains elevated in categories that households tend to be especially sensitive to, such as food (2.1%), education (2.2%), and miscellaneous goods and services (4.2%).

It is worth noting that some opinion pieces argue that Saturday's rally was not a genuine grassroots movement, but rather a political gimmick by the opposition to build momentum ahead of the 2027 general election. The protest, attended by approximately 18,000 participants, was viewed by some analysts as underwhelming. This indicates that while the cost of living remains a concern, at least for certain segments of the population, its severity may be exaggerated in the current political discourse.

The question was asked in relation to the following story: Thousands rally in Kuala Lumpur demanding PM Anwar's resignation