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Elections: Headaches in Spain & Nigeria

The Eurogroup’s February 11 meeting to discuss the Winter 2018 Interim Economic Forecast found solid and lasting growth rates for the eurozone, with a subdued core inflation outlook and a broadly balanced risk assessment to growth forecast, despite subsequent figures earlier this year. Figures published by national statistical offices nevertheless showed a decrease in annual consumer price inflation in many European countries, including GreeceItalySlovakia and Spain, though it remained constant in Ireland and increased markedly in the Netherlands. The data confirms the downward trend in inflation expected to accompany the eurozone slowdown.

Riksbanken, Sweden’s Central bank, announced it would hold the policy repo rate at -0.25% with a view to a rise in the second half of 2019 depending on CPI inflation, but revealed it would revise its GDP forecast downwards.  The Eurogroup also found post-lending programmes for Ireland and Portugal to be largely on track, and nominated Ireland Central Bank Governor Philip Lane to the European Central Bank’s executive board.

Spain’s Socialist Prime Minister Pedro Sánchez called a snap general election to be held on April 28 due to the failure to pass the 2019 budget on February 13 in a starkly divided parliament and impasse between Catalan parties and the government. Polling suggests a right-wing coalition government, as neither of the two main parties have enough support. Ekonamik previewed the general election in Nigeria (which, in a stunning development, has since been postponed), an election of some consequence for the largest economy in Africa. The Nigerian economy risks a “lost decade” if it does not diversify away from oil and the next president will have to tackle unsustainable debt. Between the presidential candidates Atiku Abubakar and president Muhammadu Buhari, a tight race was expected. We also take a look at the controversy surrounding David Malpass, the U.S. nominee for the post of President of the World Bank, an institution with which he is in many ways at odds, not least on the question of China.

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