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Sri Lanka, Spain, Singapore and Saudi Arabia Country Risk Report Q4 2015 New Report Now Available from

Market Research Reports, Inc. has announced the addition of “Sri Lanka, Spain, Singapore and Saudi Arabia Country Risk Report Q4 2015" research report to their website


Lewes, DE -- (SBWIRE) -- 08/31/2015 -- The Sri Lankan rupee depreciated 2.0% in H115, and we expect the currency to weaken further against the US dollar over the coming quarters, to LKR135.00/USD and LKR138.00/USD by end-2015 and 2016, respectively. However, strong tourism earnings growth and a positive real interest rate environment will likely provide some support for the rupee.

As electoral politics once again take centre stage in Sri Lanka, fiscal consolidation efforts by the government will likely take a hiatus as politicians are likely to present populist manifestos in order to muster public support. As such, we maintain our expectation for the country's budget deficit as a share of GDP to come in at 5.3% in 2015, versus the government's forecast of 4.4%. The CBSL will likely cut its benchmark interest rates again (by 75bps) over the coming months as a combination of low inflationary pressures and below-target economic growth provides incentive for the central bank to act. As inflation came in weaker than expected at 0.7% y-o-y in H115, we now forecast inflation to average just 1.0% in 2015, down from 3.0% previously.

The forthcoming general election in Sri Lanka will have a significant impact on policy making following the handover of executive power to parliament via the 19th Constitutional Amendment in April 2015.

The outcome, which will likely depend on the level of collaboration between President Sirisena and former President Rajapaksa, will have considerable bearing upon business sentiment over the medium term.

Sri Lanka's real GDP growth came in at 6.4% y-o-y in Q115, and will likely remain below 7.0% for the remainder of the year due to weak external dynamics, as well as political uncertainty. As such, we maintain our forecast for Sri Lanka's real GDP growth to come in at 6.5% for 2015.

Major Forecast Changes
As inflation came in weaker than expected at 0.7% y-o-y in H115, we now forecast inflation to average just 1.0% in 2015, down from 3.0% previously.

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Spain's economic recovery will outpace the eurozone in 2015 and 2016.

This recovery will mainly be driven by private consumption, with households' benefiting from cheap oil and recovering consumer confidence.

Rising political uncertainty will pose one of the main risks to the country's economic recovery.

The rise of a four-party political system is making elections due by December 2015 very hard to call, with Spain probably headed for its first coalition government since its transition to democracy.

Fiscal consolidation efforts will continue at a sluggish pace, with rising opposition to austerity and looming elections likely to result in the government offering fiscal concessions to voters over the coming quarters.

Major Forecast Changes
We have revised up our real GDP growth forecasts for Spain to 2.5% in 2015 and 2.2% in 2016, from 2.2% and 2.0% previously.

This reflects household spending benefiting more from cheap oil more than we had previously anticipated, as well as the European Central Bank's (ECB) quantitative easing programme weakening the euro, which has boosted exports.

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Singapore's restructuring drive continues, and record tightness in the city-state's labour market is acting as a drag on real GDP growth. However, we do not see the ruling People's Action Party (PAP) easing its immigration measures in any significant way ahead of parliamentary elections.

The PAP is likely to call elections in H215 in order to capitalise on positive sentiment surrounding the country's 50th anniversary since independence, as well as the government's bumper budget for FY2015/16.

Major Forecast Changes
Following a deceleration in real GDP growth to 2.9% in 2014, we believe that the economy will cool further to a 2.5% rate of expansion in 2015. Singapore's labour intensive manufacturing industry is losing competitiveness as a result of an extremely tight labour market, and along with a difficult external environment, this will cap growth over the near term.

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The replacement of Saudi Arabia's heir on April 29, along with other major changes in the country's leadership, represent a further consolidation of King Salman's authority. That said, the elevation of the king's son as second in line to the throne is likely to prove a controversial choice and could spark future instability.

The new king has quickly consolidated his authority over Saudi Arabia's economic policy apparatus, restructuring the country's administration and taking steps to improve the coordination of its vast public investment plans. That said, these changes have so far not greatly altered the economic policy line pursued by Saudi Arabia, and we retain our view that Salman will maintain his predecessor Abdullah's reforms and energy policies.

Saudi Arabia's economic outlook remains favourable in spite of the continuing slump in oil prices, but we expect growth to moderate heading into 2016. The forces bolstering economic activity – a sustained expansion in government spending and increases in oil production – will gradually tail off over the coming quarters.

The Saudi-led military operation in Yemen has so far achieved none of its desired objectives, and further air strikes are unlikely to make a tangible difference to the balance of power on the ground. A move towards political dialogue between warring factions is likely, but any agreement between Saudi Arabia and Yemen's Shi'a Houthi rebels will be difficult to reach and even more difficult to implement.

Continued heavy spending on the part of the government indicates its ongoing concerns about the need to shore up its key bases of support, given the persistent threat of public unrest. While we maintain that large-scale protests are unlikely to occur in Saudi Arabia, large youth unemployment coupled with a lack of political liberties mean that tensions will continue to linger.

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