A wealthy consumer base, that is embracing hypermarket offerings is driving sales growth for the likes of Carrefour and will be a key reason behind the company strengthening its operations in the Middle-East by acquiring Géant hypermarkets, expanding its presence in UAE, Kuwait and Bahrain.
The Lithuanian medical device market will record high single-digit growth in local currency terms as the economy expands, while it will register higher growth in US dollar terms on the back of a stronger outlook for the euro. The market will benefit from positive drivers such as the ageing population and the potential to grow the private health sector, while a reduced health insurance budget for medical devices in 2018 and the small domestic industry will restrict market growth.
The SSA region will continue to represent a small and insignificant portion of luxury brand portfolios over the coming years, with limited opportunities for rapid spending growth in the region. Luxury companies will favour investment in stable service economies, rather than volatile commodity exporters, with a key focus on men as their target demographic in Africa. We forecast very few households to exceed the USD75,000 income threshold, where we see luxury spending take off over our five-year forecast period to 2021. This puts a ceiling on opportunities for a luxury boom similar to that witnessed in China over the last few decades.
The UAE's budget balance will return to surplus by 2019, owing to the recovery in oil prices, the introduction of new taxes - most notably the value-added tax in 2018 - and continued rationalisation of current spending. Capital expenditure will drive total spending over the coming years, but will pose no threat to fiscal sustainability.
Continued mixed messages regarding the country's nuclear agenda and the prolonged uncertainty in South Africa's renewables sector will weigh on investor sentiment across the South African power sector.
Inflation is running far higher than official figures suggest and we believe will continue to do so until there is meaningful economic reform. Until such point, the economy is likely to see episodes of shortages of basic goods.
Disruptive technologies such as fintech, blockchain, artificial intelligence, drones and cyber security will all have a place in the autos sector, but with varying levels of impact. Artificial intelligence and cyber security are the highest impact as they relate to the connected and autonomous car technology that all major carmakers and tech firms are investing heavily in right now.
A constitutional amendment to empower the Japanese military's status is far from assured, despite Prime Minister Shinzo Abe's October election victory. Opposition to the planned amendments remains considerable, and Abe could be toppled if he loses the required constitutional referendum. Meanwhile, government efforts to press ahead with constitutional change could distract it from tackling economic issues.
As technology becomes increasingly central to miners' efforts to keep costs down, the integration of these two sectors will accelerate and result in streamlined operations and a more transparent mining industry. We highlight artificial intelligence, blockchain, drones and cyber security as particularly relevant to the future of the mining industry.
BNM's decision to keep the OPR on hold at 3.00% during its monetary policy meeting on November 9 was in line with our expectations and we expect the central bank to hike interest rates by 25bps to 3.25% in 2018, on the back of an improving economic outlook and to pre-empt rising inflation.