Global demand for electricity is projected to surge over 20% this decade. Power generation accounts for 40% of emissions and Emerging markets, notably China and India, will account for over 85% of rising demand in the next ten years.
Even though overall industrial production growth softened in 2019, some investment-driven sectors outperformed, including those focused on agriculture, oil downstream, chemicals, construction and transportation.
Russia entered 2020 with a spending backlog of around 1% of GDP, which the new cabinet may now start unwinding. With the budget breakeven oil price below $50/bbl there is some space to increase spending.
Efforts to investigate financial crimes have been largely unsuccessful due to endemic corruption within the judiciary.
Balance of payments for 4Q19 suggests weakness in the current account and tells us that as much as $25bn of net portfolio inflows into local currency state bonds (OFZ) may be needed in 2020 in order to avoid ruble depreciation.
CEESE had a good year in 2019, with the economies in the region buoyed by increasing domestic consumption and capital spending that allowed the region to decouple from western Europe.