Despite Qatar's dominant position in the global LNG market, there is little risk to either pricing or trade flows from escalating tensions within the region, as supplies can continue uninterrupted through the Strait of Hormuz.
High public debt and a widening twin current account and budget deficit over the next two years mean that sovereign risks in Ukraine will remain elevated. The country is still highly dependent on IMF support to maintain fiscal stability, in fact even more so than before, as the ongoing trade blockade with the Donbas is taking a toll on the country's economic recovery.
The political and policy environment of the Netherlands will remain broadly stable in the coming years following the poor election result for the right-wing Party for Freedom (PVV), which will not be in government. We expect to see a centre-right coalition government under incumbent Prime Minister Mark Rutte take shape over the coming months.
Depressed real interest rates and the adoption of a more expansionary fiscal policy will keep Turkey's savings rate low and the current account deficit uncomfortably wide, maintaining the economy's hefty reliance on foreign financing over the coming years. Sizeable investment will continue to be directed towards non-exporting sectors, impeding an improvement in Turkey's large trade deficit.
The European Central Bank (ECB)'s Governing Council is due to meet on June 8, and while we do not expect any change in the policy framework to be announced, we will be watching for changes to the official economic projections which are due to be updated.
Iran's mining industry, especially its steel sector, will see an uptick in foreign investment in the coming years as the re-election of President Hassan Rouhani signals policy continuation. Nevertheless, the government's target of attracting USD50bn to the industry by 2022 will fall short due to continuing non-nuclear-related US sanctions on Iran, poor infrastructure, corruption and bureaucracy.
The HIV market is contracting, but there is still a demand for novel therapies. The larger players are attempting to develop once-daily/single tablet treatments, which could offer a significant advantage over competitors while reducing the chance of drug-resistance. Smaller players, such as Immune Therapeutics, are trying to establish themselves in the African market before the approval of these latest drugs. However, the smaller players will struggle to hold a large market share without the expertise and reputation.
The attractiveness of the South African infrastructure market as an investment destination is bolstered by the overall ease of doing business in the country and its position as the gateway to the wider SSA region. The returns on offer are limited compared to its faster-growing peers, as constrained government revenues and weak private investment translate into tepid construction industry growth.
The new Macedonian government, formed after a parliamentary vote on May 31, will put an end to the country's prolonged political deadlock. The new coalition will prioritize economic growth and the acceleration of EU And NATO Accession Talks. Having said that, we maintain our long-term view that political stability will remain elusive, owing to an obstructive opposition and persistent ethnic issue.