In the first half of 2017, Brazil’s economy reached a turning point, exiting from the deepest recession in decades. The economy was supported by a record agricultural harvest and an uptick in consumption, as a result of lower inflationary pressures, decreasing borrowing costs and positive sentiments over the adopted government reforms. Based on these fundamentals, in October 2017, the IMF raised its growth estimates for Brazil’s economy from 0.3% to 0.75% in 2017, and from 1.3% to 1.5% in 2018. The institution defended the government drive towards fiscal sustainability, including the adopted public spending cap in December 2016 and the ongoing pension reform, as key measures for the recovery of confidence and private sector investment. Nevertheless, economic growth is projected to remain subdued in the medium term, at about 2% per year through 2022, mainly due to the recent rise in political instability that poses risks to the government’s reform agenda. New corruption investigations surrounding top government officials coupled with the upcoming general elections in October 2018, are rapidly closing the window for legislative action. Notably, reforms of the pension system, public healthcare, tax code, and infrastructure concessions regime are seen as essential to support macroeconomic stability, secure confidence and bring the economy back to its potential.

In the first half of 2017, Brazil’s economy reached a turning point, exiting from the deepest recession in decades. The economy was supported by a record-high agricultural harvest and an uptick in consumption, as a result of lower inflationary pressures, decreasing borrowing costs and positive sentiments over the adopted government reforms. Based on these fundamentals, in October 2017, the IMF raised its growth estimates for Brazil’s economy from 0.3% to 0.75% in 2017, and from 1.3% to 1.5% in 2018. The institution defended the government drive towards fiscal sustainability, including the adopted public spending cap in December 2016 and the ongoing pension reform, as key measures for the recovery of confidence and private sector investment. Nevertheless, economic growth is projected to remain subdued in the medium term, at about 2% per year through 2022, mainly due to the recent rise in political instability that poses risks to the government’s reform agenda. New corruption investigations surrounding top government officials coupled with the upcoming general elections in October 2018, are rapidly closing the window for legislative action. Notably, reforms of the pension system, public healthcare, tax code, and infrastructure concessions regime are seen as essential to support macroeconomic stability, secure confidence and bring the economy back to its potential.

In 2015, we published a Special Report on 'Deconstructing The African Consumer: Risks & Opportunities', which posited that the optimistic Africa consumer narrative has been more myth than substance so far and that this would continue over the next decade. BMI has consistently advocated a more cautious view on the assumed trajectory of the Sub-Saharan African (SSA) consumer story, dating back to 2010. Rather than the rise of an emerging middle class driving spending in high value and premium goods, we favoured a 'high-volume, low-margin' strategy for consumer-facing companies in the region. Fast-moving consumer goods companies appear to be moving their strategy in this direction. We continue to hold the view that the slow formalisation process will weigh on the idea of an 'African consumer boom' and that consumer-facing companies must adapt their strategies more toward high volumes, low margins, localisation and embracing the informal retail sector (see 'Assessing Our Africa Consumer View', June 26 2017).

Fourth largest market in the CEE region. Per capita spending is well above the CEE average. Market will record a moderate CAGR. Consumables and other medical devices have the largest market shares. Much of the market is still largely reliant on imports. • Growing domestic production sector, aided by foreign investment. Well-established public health system, funded by compulsory insurance. The private sector is gradually expanding.

Europe remains in third place in the global rankings in the most recent update of our Autos Production Risk/Reward Index (RRI), with the region's average score falling slightly to 48.7 out of a possible 100, from 49.5 last quarter. Europe remains below the Americas region with a score of 49.8 and global leader Asia with a score of 58.6. Europe's strengths still derive from its higher scores in the risk category for which it scores highest out of all the regions (with a score of 58.3). This is as a result of Europe's lower operational and logistics risks (with scores of 62.6 and 64.3 respectively) as well as more stable short- and long-term political environment (with scores of 56.2 and 61.9) when compared to other regions across the globe.

Highly centralised healthcare sector, controlled by the government. Smallest medical device market in the Americas region. Other medical devices, consumables and diagnostic imaging have the highest market shares. Market heavily reliant on medical device imports, particularly from Europe, China and Japan. Lack of advanced medical device manufacturing capacity. Moderate medical device market growth over the forecast period. One of the smallest per capita medical device expenditures in the region.

Croatia approved a legal framework for exploration of oil and production of oil and gas in 2013. The Hydrocarbons Exploration and Production Act (ZIEU) framework was aligned with EU oil and gas regulations. The Mining Act (ZR), which also came into effect in 2013, is another key regulatory framework governing the oil and gas sector.

Colombia's business environment in the oil and gas sector improved over the past decade, particularly due to the partial privatisation of state-owned Ecopetrol in 2003. The government's attempts to improve the country's security situation, particularly regarding the Fuerzas Armadas Revolucionarias de Colombia (FARC) guerrilla group, also led to increased foreign investment into the country over the past decade, translating into record oil and gas production growth. Continued progress, however, has grown increasingly tenuous as a result of weak below-ground rewards amid a lower oil price environment. With large direct investments still needed to ensure growth within the sector, we note that less favourable project economics will undermine private sector investment over the coming decade. Furthermore, while attacks on oil pipelines have declined versus years past as a result of the ongoing FARC disarmament, such disturbances continue to negatively impact the investment appeal of Colombia's hydrocarbon resources.

Colombia is the third largest market in Latin America. The market represents around 5% of health expenditure. Other medical devices and consumables have the largest market shares. The market relies on imports, despite strong domestic production focused on consumables. The market will record high growth. Per capita expenditure is low, therefore there is considerable growth potential.

In 2002, the government dismantled the monopoly-holding State Power Corporation, breaking it into separate units of generation, transmission and service. Since the reform, China's electricity generation sector has been dominated by five state-controlled holding companies: China Huaneng Group, China Datang Group, China Huadian, China Guodian Corporation and State Power Investment Corporation. Between them, they manage about 80% of generating capacity. Much of the remainder is in the hands of independent power producers, often in partnership with privately listed arms of the state companies. Deregulation and other reforms have opened the electricity sector to foreign investment, although this has so far been limited.