Emerging Markets Radar (July 8, 2013)
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- Poland's purchasing managers' index (PMI) rose to 49.3 in June, up from 48.0 in May. This is the second-highest result in the current cycle of 15 readings below the 50 mark. The bigger picture is that growth in manufacturing is still bordering on contraction, but June’s PMI reading suggests it might swing into growth in the third quarter. As seen in the chart above, HSBC believes the economy has bottomed in the first half of 2013 and a gradual, though slow, recovery will follow. In addition, Poland’s central bank cut borrowing costs to a record low, cutting by 2.25 percentage points since November. The central bank indicated that the cycle of interest rate reductions was over, and the European Union’s largest eastern economy is poised to recover.
- Mexico has approved a 10 billion peso ($772 million) credit program for the nation’s homebuilders as Homex, Urbi and Geo, the three biggest players, seek to restructure their debt after a shift in government policy depleted their cash. Despite the modest size of the financing program, which equals to just 18 percent of the 55 billion pesos of debt owed by the three biggest homebuilders, the program’s approval is a sign that President Enrique Pena Nieto enjoys sufficient parliamentary support to have his “Mexico Plan” bills passed by the legislature.