Sergi Lanau · Jonathan Fortun / Institute of International Finance
Ghana’s external debt restructuring is evaluated through recovery scenarios consistent with its targets and conservative macroeconomic assumptions. The January 2023 baseline combines an 8% principal reduction with substantial coupon cuts, producing a value of 38 cents per dollar at a 12% exit yield. A much stronger macroeconomic scenario raises recovery to 47 cents; these are conditional valuations, not a completed exchange outcome.
Robin Brooks · Jonathan Fortun · Jonathan Pingle / Institute of International Finance
Falling natural gas prices did not mean Europe’s energy shock had ended. Robin Brooks, Jonathan Fortun and Jonathan Pingle point to prices still above historical norms and weaker production in industries that use large amounts of gas. Their January 2023 analysis links lower energy demand to economic damage, while emphasizing the continuing loss of purchasing power through the terms of trade.
Robin Brooks · Jonathan Fortun · Jonathan Pingle / Institute of International Finance
An assessment of forecasting mistakes in 2022 acknowledges the failure to warn ahead of Russia’s invasion of Ukraine. The authors also revisit an overly pessimistic European recession forecast and the unexpectedly broad frontier market selloff. The retrospective treats these misses as lessons for economic analysis and risk assessment rather than presenting only successful calls.
Jonathan Pingle · Jonathan Fortun · Robin Brooks / Institute of International Finance
Narrowing inflation across US consumer price components had signaled disinflation before the turn in core inflation, according to this December 2022 analysis by Jonathan Pingle, Jonathan Fortun and Robin Brooks. They identified early signs of a similar pattern in the euro area as their monthly inflation breadth index fell and price increases slowed in components sensitive to energy costs. The authors anticipated a turn in euro area inflation and argued for a less restrictive ECB stance.
Sergi Lanau · Martín Castellano · Jonathan Fortun / Institute of International Finance
Congressional reductions to Lula’s proposed spending package did not resolve Brazil’s fiscal uncertainty heading into 2023. The December 2022 assessment saw limited scope for a large near term decline in risk premia and called for substantial adjustment to stabilize debt. It contrasted reversing tax cuts and retaining the spending cap with a major relaxation of fiscal rules that it considered unsustainable.
Jonathan Fortun / Institute of International Finance
Portfolio investment into emerging markets reached $37.4 billion in November 2022, led by $23.0 billion in equity inflows compared with $14.4 billion in debt. Chinese equities attracted $8.5 billion. The December release separates these asset allocations to show where the month’s capital entered emerging markets.
Sergi Lanau · Martín Castellano · Jonathan Fortun / Institute of International Finance
Brazil’s incoming Lula administration faced a gap between favorable 2022 revenues and spending cuts that the authors considered unrealistic for 2023. Sergi Lanau, Martín Castellano and Jonathan Fortun assess room to protect Bolsa Familia while maintaining fiscal credibility. Their November 2022 scenarios distinguish a manageable targeted expansion from larger packages that could unsettle markets.
Robin Brooks · Jonathan Fortun · Jonathan Pingle / Institute of International Finance
Market stress in 2022 challenged the idea that advanced economies had unlimited fiscal room. Robin Brooks, Jonathan Fortun and Jonathan Pingle connect UK bond turmoil, yen depreciation under Japan’s yield cap and Italy’s reliance on the ECB to constraints on government financing. Their November 2022 assessment argues that low interest rates should not be mistaken for unlimited capacity to borrow.