Question:

When the new budget procedure start, how long does it take at a minimum legally? Are there any indication of when the new budget will be proposed ?

The question was asked in relation to the following story: Government withdraws budget bill, new budgetary procedure to start

Answer:

The government will likely hurry to propose a new project bill as soon as possible after it reaches an agreement with the employers' organisations and trade unions (negotiations have been resumed as of last week), but there is no indication yet when this will take place. The social partners met for a second time on Dec 2, but talks are set to continue, the finance minister said yesterday.

Legally, the entire budgetary procedure lasts between April and end-October, when the government has to submit the budget bill for voting in the parliament. There is no explicit deadline set for the voting of the budget bill after the budget submission, but usually it takes between three and five weeks to complete the voting in the parliamentary commissions and the parliament on first and second reading. Probably, the government will itself indicate its expectations on the budget final adoption timing after presenting its new version, in our view.

Question:

Wouldn't amending the Fiscal Responsibility Act be the simplest solution, since it can, as far as I know, be changed by a simple majority (as in 2020)? Why would that "provoke criticism" when this government was elected on the basis that the previous one was overly tight fiscally and that the economy could benefit from a better balance?

The question was asked in relation to the following story: Revised budget cannot differ from existing fiscal framework - Fiscal Council

Answer:

The main reason is political. Czech voters tend to be on the fiscal conservative side, and no government that has loosened fiscal policy too much, unless in extraordinary circumstances, has fared well. While there may be some tolerance for higher spending, going beyond the restrictions in the Stability and Growth Pact would be considered excessive. Both ANO and the Motorists, members of the nascent ruling coalition, campaigned on promises to maintain fiscal stability. Still, ANO has been much more lax this time, saying that fiscal consolidation could be achieved by the end of the new government's term, not immediately, and an initial fiscal impulse may be necessary.

In any case, amending the fiscal responsibility act, which is an ordinary law that requires only a simple majority, will be perceived as a sign that fiscal policy will loosen too much. Naturally, it depends on what amendments are introduced, but the general perception will be strongly negative, in our opinion. There isn't much of an appetite for a big spending government these days, especially when fiscal stability has been increasingly eroding in the EU (Romania is often given as an example in Czech media). There is a consensus among voters that government debt needs to decrease, so anything that foreshadows debt financing will likely backfire quickly.

The new ruling coalition is already unlikely to be one of the popular ones, given the presence of the SPD, a nationalist party, so it will not take much for voters to turn sour. ANO leader Andrej Babis has been sensitive about this, and would rather be careful about higher spending. We believe this is the reason ANO has been hammering about expenses in the 2026 budget not covered by revenue (about CZK 95bn at this point). It will likely serve as a pretext to justify higher spending, which would be inevitable given ANO's fiscal pledges.

Question:

Do you know the share of skilled workers in the labour market?

The question was asked in relation to the following story: Minimum wage to increase by 11% in 2026, skilled labour wage - by 7%

Answer:

Some 750,000 workers receive the minimum wage for skilled workers and 250,000 workers - the headline minimum wage. The larger scope of the minimum wage for skilled workers made it a more important sticking point in the wage negotiations, we note. This is as of last year, given that the two minimum wages evolved uniformly in the years before. On the other hand, the headline minimum wage seems to have a stronger role for overall wage setting in the economy judging by last year when wages evolved mainly in line with the headline minimum wage, we believe.

Question:

Can you provide data on official CPI weights?

The question was asked in relation to the following story: CPI inflation drops to 12.4% y/y in November

Answer:

The official breakdown by sector is available here, including a 12-month series and a monthly overview.

Question:

Could you please provide detail on Montenegro's fiscal contingent liabilities (main risks and estimate in % of GDP)? How do you track them?

The question was asked in relation to the following story: News about second part of the Matesevo-Andrijevica highway

Answer:

Montenegro's fiscal contingent liabilities stem for three major sources:

1. Guarantees to state-owned companies
2. Unfavourable court decisions
3. Cost overruns related to the implementation of the Bar-Boljare highway project

Risks could be higher with the launch of works on the second highway section. However, the official debt statistics do not include arrears or contingent liabilities. Those liabilities are not systematically collected and monitored, which suggests that the total public debt may be higher than reported.

Question:

Is there any info about Poland's planned issuance or borrowing needs for 2026?

The question was asked in relation to the following story: Sejm names new Fiscal Council to be led by budget hawk Dudek

Answer:

Yes, we have most of the details of issuance next year. The table at the bottom of my story here has all the relevant details regarding financing (I repeat the relevant details below). Net financing needs are to be PLN 422.9bn while gross financing is put at PLN 688.5bn.

The net borrowing requirement for 2026 of PLN 422.9bn is to be well up from the PLN 300.5bn now expected for 2025 (original target was PLN 366.7bn). Domestically, net borrowing is to be PLN 241.6bn (which is up slightly from the PLN 240.8bn in the budget draft) while net foreign borrowing is to be PLN 181.2bn (though a lot of that is related to EU funds and currency movements). Actual net issuance of Treasury securities domestically is to be PLN 241.6bn, which is actually down from the PLN 266.2bn expected for 2025, and net issuance of Treasury securities abroad is to be PLN 27.9bn, which is also down from the PLN 33.0bn expected for 2025. One thing to note, as the FinMin does, is that the borrowing requirements are boosted by a PLN 112.8bn loan to be taken out to pre-fund Recovery and Resilience Facility (RRF) loan programs that will later be reimbursed by the EU.

The budget bill did reduce gross borrowing needs to PLN 688.5bn from the PLN 690.0bn written into the initial budget draft, though that is still to be well up from the PLN 488.6bn expected for 2025. It should be noted that the FinMin has full financed its original financing total of PLN 553.0bn and so is already well into pre-financing mode.

The 2026 gross financing target is at a record level and it will mean more domestic issuance. The FinMin sees total Treasury security issuance at PLN 457.2bn in 2026, to be up from the PLN 415.6bn now expected for 2025. Much of this rise will come from higher T-bill issuance (to be PLN 58.1bn in 2026, up from PLN 30.0bn in 2025) and higher savings bonds sales (PLN 81.2bn in 2026, up from PLN 73.7bn in 2025). Treasury bond issuance is to rise, but only slightly, going to PLN 317.8bn from the PLN 312.0bn now expected for 2025. Of the T-bond issuance, the gross issuance of fixed-rate bonds is actually to fall to PLN 231.7bn from the PLN 238.5bn targeted for this year, though the floating-rate note total is to rise to PLN 77.7bn from PLN 66.1bn and the indexed-bond total is to rise to PLN 8.5bn from PLN 7.5bn.

Gross foreign bond issuance is to be PLN 48.6bn in 2026, which was left unchanged from the budget draft. That is to be down from PLN 56.2bn in 2025 (and which implies slightly more issuance since the current amount raised from foreign issuance this year is PLN 47.7bn).

FinMin debt department director Czarnecki recently told Bloomberg that early 2026 would see heavy sales of foreign bonds, including the usual EUR and USD ones, but also possibly a JPY one.

One of the remaining questions is what pre-financing of gross financing will be at year-end. The FinMin has said it will be around 20%, but that total will likely be beefed up by some of the cash it has. We think the total will be 30-40% all told. In 2024, the FinMin pre-financed 30% of the 2025 gross financing total, including the usage of PLN 137bn in cash. However, borrowing this year has been bigger than it was in 2024, so pre-financing might be higher this year.

Question: Do you have a brief preview of the Bucharest elections please?

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

Answer: The ruling parties agreed to field separate candidates to avoid another source of quarrel within the coalition.

The most recent CURS poll shows Daniel Baluta (PSD) leading with 26%. He is closely followed, within the margin of error, by Ciprian Ciucu (PNL) at 23% and Catalin Drula (USR) at 22%. TV anchor Anca Alexandrescu, backed by nationalist parties, ranks fourth with 17%. Most polls indicate a similar hierarchy, except one that placed Alexandrescu ahead of Ciucu and another that showed Ciucu in the lead. Nevertheless, we don't find polls reliable and suspect they are often used for manipulative purposes. So far, three candidates have withdrawn (each with less than 5% support), transferring their backing to PSD, PNL, and the nationalist contenders.

The campaign has been unspectacular. We believe both Baluta and Ciucu would make good mayors, given their track records in District 4 and District 6 of Bucharest, respectively. The probability of new coalition tensions is lowest if either of them wins.

Baluta is backed by PSD but avoids being visibly associated with the Social Democrats for obvious reasons. He enjoys a solid reputation within the party, which is why we suspect PSD leader Grindeanu may not want him to win, his victory would strengthen his influence in PSD and jeopardise Grindeanu's position. If he does win, it will be entirely his own merit, and this is the first election in which we don't suspect PSD of planning fraud.

Ciucu is supported by PNL and has been the most heavily attacked during the campaign, particularly by USR. This suggests that rivals see him as the most probable winner (all parties have internal polls that are not disclosed). We also think he is most likely to win.

Catalin Drula (USR) benefits from President Dan's support, though this has sparked controversy, as the president is expected to remain neutral. Still, we don't believe Drula will manage to build stronger support than Ciucu or Baluta. Bucharest voters associate him more with central politics than with President Dan, despite the latter's strong local support. Nonetheless, coalition tensions would intensify if Drula were to win, as USR would likely sharpen its attacks on PSD, in our view.

Anca Alexandrescu is a popular TV anchor at Realitatea, a station that has strongly promoted Calin Georgescu, the extremist who won last year's cancelled presidential election. Georgescu has not expressed support for her, but she is backed by the nationalist AUR. In the unlikely event of her victory, the ruling coalition would indeed be shaken, we think.

Question:

It was reported in early November that Economy Minister Luis Caputo held a meeting with investors organized by JPMorgan, where the minister said he would present a plan for a bond buyback and FX reserve accumulation within 30 days. Some news outlet mention Caputo would meet with investors in early December. Have you heard anything about the meetings or a possible announcement?

The question was asked in relation to the following story: Caputo would announce debt buyback and reserve accumulation plan within 30 days

Answer:

The only local mentions we could find about Caputo meeting with investors at some point in early December are from a source we don't trust, though the minister meets with investors often these days. As for the announcement of a plan, we hadn't seen anything until Caputo mentioned in a forum earlier Wed. that he would share more information about FX reserve accumulation plans and a loan from banks (presumably would fund any bond repurchase program) at a later point. We don't really know the context of that early November mention about announcing financial plans within 30 days, but given what we know of Caputo, he was probably vague and will not feel obliged to fulfill that 30-day deadline. Right now the situation seems fluid and there are different options on the table, so it wouldn't be surprising if it takes Caputo a few more weeks to decide exactly how to proceed.

Question:

The comment on the Treasury buying USD as the monetary base grows is confusing. Would the BCRA be creating ARS to buy USD in this scenario? As in assuming ARS demand rises, they can create more without driving inflationary pressures. Is the assumption that the Treasury's USD purchases were only due to their cash surpluses correct?

The question was asked in relation to the following story: Caputo ponders bank loan offers for USD 7bn, says could buy USD 7bn in reserves

Answer:

Our comment in the second-to-last sentence in the second paragraph perhaps caused the confusion, since the causal link could be interpreted backwards. It's not that the Treasury buys USD as the monetary base grows. Rather, if demand for money grows, then the Treasury buys USD unsterilized to satisfy that demand, and the monetary base grows as a result. We believe it's an archaic setup, and for now Caputo's "rising demand for money" seems to mean little more than "the exchange rate has appreciated to a level we like." Hopefully they eventually move to a more orthodox reserve accumulation framework with clear, verifiable triggers for USD purchases.

As for the second question, the government claims that Treasury USD purchases were made with cash surpluses so far, but a) that's not really accurate, and b) those cash surpluses are nearly exhausted. We say that claim is not accurate because the BCRA sent the Treasury unrealized accounting profits equivalent to USD 9.9bn earlier this year.

Questions:

Could you please outline what is known about the financing sources for the government debt management operations abroad?

I understand that initially, the TRS in CHF/EUR was used, but later operations were financed through EUR issuance. Could you please outline what was borrowed and what was repurchased?

The questions were asked in relation to the following story: CARF sees primary deficit at 3.0% of GDP, total deficit at 6.2% in 2025

Answer:

The most pressing issue is the opacity of the Finance Ministry regarding its derivatives and debt operations abroad. Although one might infer the purpose and motivations from financial engineering knowledge, there remains a tendency toward hard-to-explain speculation. For this reason, the answer below is based solely on two somewhat vague statements from the ministry, with direct translations provided to prevent misinterpretations or assumptions not supported by the government [please see here and also here].

In short, the ongoing strategy involves borrowing in EUR to buy back heavily discounted, short-term USD-denominated debt ('global bonds'). The strategy uses temporary resources from the total return swap (TRS) and a previously executed cross-currency swap (CCS), collateralized by liquid assets such as US T-bills and CHF flows, to finance the buyback of discounted dollar-denominated global bonds. These temporary positions were then funded permanently, and "the portfolio is being optimized by issuing new debt in euros and shifting some liabilities into Swiss francs." Furthermore, multilateral credit rates have been shifted from SOFR to CHF fixed rates.

For this, in our understanding, two phases have been executed thus far:

Phase 1 (initial funding with financial instruments): The government first used 'non-debt-creating swaps' to get temporary cash for buybacks. A CCS in CHF provided resources to repurchase dollar-denominated debt at a discount. At the same time, a TRS used liquid US Treasury Bills as collateral to obtain temporary, lower-cost resources to buy back dollar debt. Specifically, the Finance Ministry employed the CCS to facilitate a USD 2bn bond buyback, which created a Swiss franc liability. In September, it closed the swap position by buying francs at a lower exchange rate, generating a USD 85.2mn profit and thus eliminating the currency risk from the original operation.

Phase 2 ('permanent' Funding with new bond issuance): This temporary swap funding was later replaced with permanent financing through new EUR bond issuances [note: as of now, two have been issued, but it is unknown whether the ministry has executed additional CCSs]. The strategy explicitly planned to replace repurchased amounts with new euro issuances and to phase out the TRS using those issuances gradually between 2025 and 2026.

Also, in our view, the reason for using the Total Return Swap (TRS) is to accomplish both a debt restructuring and risk management goals, specifically:

1. To replace expensive USD Debt with EUR Debt: The primary goal is to restructure Colombia's external debt portfolio by using the proceeds from the TRS to buy back expensive US dollar-denominated debt and replace it with new, 'cheaper' euro-denominated debt, as highlighted.
2. To isolate and manage a specific currency basket risk: Unlike the previous CCS (which exposed Colombia to CHF/COP risk), the TRS "strategically shifts the currency exposure away from the COP." It creates, as we assess, a tri-currency structure where: USD is the operational currency, CHF is the exposure currency, and EUR is the hedging/mitigating currency. The TRS allows Colombia to take on CHF exposure deliberately, but then systematically hedge it down by issuing bonds in euros, as the document notes, "as long as the Republic continues to issue bonds in euros... the risks of the TRS will continue to decline" [which, in our view, assumes linearity in the risks exposed, which is a questionable assumption].

Still, allow us to point out some caveats about these operations. To start, please note that the use of derivatives is highly speculative and unconventional for a previously orthodox sovereign like Colombia. Aside from the noted opaque language used by the Finance Ministry, it is unclear whether the ministry has faced any margin calls due to the TRS or which fees have been incurred. Also note that, in a recent story, we pointed out that the government had to register the TRS as a liability, not a traditional off-balance-sheet liability, which makes sense, but also increased the debt-to-GDP ratio by about 4pps. The TRS has been active for about two months, and it's still too early to determine whether the ministry's risky strategy will succeed. Also, it is unclear at this point which hedging strategies the ministry is using, what its USD cash balances are, or how much of its COP liquid resources are being used to fund the EUR issuances, as noted in our story about the most recent EUR issuance from which your question originated.

Question:

The updated 2025 estimates from the government foresee Taxes on Goods and Services of 1.87 trillion AOA, after excluding IPP tax. That is an increasewell above nominal GDP growth. Do you know what assumptions is the government making on this?

Answer:

This rise could be partially explained by high inflation-IMF projects 21.6% for 2025-so it is natural that taxes on goods and services increased as the tax base expanded with prices. The combination of a higher price-driven tax base and better collection efforts, including measures to reduce informality and the rollout of electronic invoicing, is the most plausible explanation for the strong growth in these revenues.

Question:

Is there any source of information on investment on exploration from either the government, Sonagol or private oil companies?

Answer:

One report you might find helpful is the latest 2024 Management Report by the oil sector regulator ANPG. It contains quite extensive information on the oil sector. According to page 24, financially, a total of USD 18.6bn was committed through 577 approved contracts for goods and services in the sector, representing an 11% increase over 2023 (USD 16.9bn). This spending was distributed across development with USD 10.7bn (57%), operations with USD 7.8 (41%), exploration with USD 241mn (1%), and administration and services with USD 148.9mn (1%). Blocks 20/11 and 0 together accounted for almost half of the total, with USD 4.9mn (26%) and USD 4.3mn (23%), respectively, reflecting key contracts to advance the Kaminho project in Block 20/11 and extend production in Block 0 until 2050. On page38, there is a chart on investment in active oil concessions only you might find helpful.

For Sonangol, latest information is in their 2025 H1 report. Section Section 2.3 INVESTIMENTOS, but you could laso check 2024 Annual report, section 4.A. Oil and gas properties.

The question was asked in relation to the following story: ANPG: onshore oil exploration gains momentum

Question:

Where can I find information of FX market operations and central bank FX interventions?

Answer:

The BNA publishes regularly a report on the evolution of foreign exchange market. It has information on fx sales by the central bank, finance ministry, oil and diamond sectors. Here is the latest one for H1 2025. https://bna.ao/#/pt/publicacoes-e-media/relatorios/relatorio-evolucao-mercado-cambial/detalhe/682.

You can you can see all reports here: https://bna.ao/#/pt/publicacoes-e-media/relatorios/relatorio-evolucao-mercado-cambial

The question was asked in relation to the following story: Slowdown in fx interventions

Question:

Can you share the link to the documents please?

The question was asked in relation to the following story: Cabinet approves 2026/28 MTEF, oil price pegged at USD 64.9/barrel in 2026

Answer:

The 2026 MTEF paper isn't published yet. Media have been reporting on figures given by the budget minister at a press briefing on Wednesday. It will likely be published after the framework is sent to the National Assembly on December 8, where it will appear here: https://budgetoffice.gov.ng/index.php/resources/internal-resources/policy-documents/mtef

Question:

How can I access the preliminary issuance calendar to check the original amounts planned to be raised?

The question was asked in relation to the following story: Govt raises XOF 33bn in domestic securities in auction

Answer:

You can access the calendars from the regional debt management agency here.

Question:

How many FTA negotiations has India launched and concluded this year? With whom?

Answer:

India has been unusually assertive on the trade diplomacy front in 2025, launching, concluding and reviving multiple free trade agreements (FTA) negotiations as part of its broader push to reposition itself in global supply chains. While no official tally exists from the Commerce Ministry, public announcements point to a clear acceleration in activity across all stages of the FTA pipeline.

Three new FTA negotiation tracks were formally launched this year. Talks with New Zealand began on 16 March, marking the first meaningful engagement after more than a decade of dormancy. India also opened negotiations with Israel, signing Terms of Reference on 20 November, and with the Eurasian Economic Union (EAEU) on 26 November, signalling New Delhi's intent to diversify partners beyond its traditional corridors. Discussions with Qatar and the US continue in parallel, although the government has not yet clearly framed them as full FTA pathways.

On the outcomes front, India concluded two major trade agreements in 2025. The long-delayed India-UK FTA finally crossed the finish line, with negotiations wrapped up in May and the agreement signed in July. Separately, India concluded its comprehensive trade deal with the EFTA bloc (Switzerland, Norway, Iceland and Liechtenstein) after 16 years of intermittent talks.

The question was asked in relation to the following story: Israel, India launch FTA negotiations