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Iraq forgave USD 256 mln of Mozambique’s long-standing oil debt, leaving a balance of USD 64 mln to be paid over 15 years starting in 2029. This debt, dating back to a 1979 oil supply deal, was part of ongoing negotiations in Abu Dhabi. Despite this relief, Mozambique’s debt burden remains heavy, and Fitch Ratings downgraded the country’s foreign-currency credit rating to CCC, citing political unrest and financial challenges.
Somalia’s government reached an agreement with the Abu Dhabi Fund for Development to settle 944.8 mln dirham (USD 257 mln) of debt. The deal, signed at the World Government Summit in Dubai, is seen as a milestone in Somalia’s economic development, aimed at maintaining macroeconomic stability and fostering growth.
Despite strong economic growth projections for 2025, Peru’s upcoming April 2026 election is raising investor concerns. A record number of political parties are participating, which could lead to market volatility. Investors are wary of potential political instability after the 2021 election saw the currency plummet and $17 billion in capital flight, although the elected government did not dismantle the pro-market constitution.
State media in Azerbaijan warn the country implement economic sanctions against Russia, over the Azerbaijan Airlines plane crash in December, which Baku says was accidentally shot by Russian air defenses. A state TV channel said regional energy projects, and the North-South transport corridor linking Russia and Iran via Azerbaijan, could be affected. The Azerbaijani Foreign Ministry has also imposed an entry ban on Russian ruling party MP Nikolai Valuyev, because of his comments about the country.
Kazakhstan’s President, Tokayev, ordered a review of the government’s VAT reform proposal, saying that the suggested rate of 20% was “too high”, after opposition from the business community. The President commented that differentiated VAT rates, on specific sectors, could be implemented. Further, the Ministry of Transport has proposed legislation to improve the investment attractiveness of state railway company KTZ, ahead of its planned initial public offering this year.
Fitch downgraded Mozambique’s long-term foreign currency debt rating to CCC from CCC+ due to unresolved political unrest and fiscal challenges. The fiscal deficit widened to 6.5% of GDP in 2024, driven by revenue shortfalls and cutbacks in public spending. Fitch warned that the country’s reliance on short-term financing poses risks to domestic debt servicing.
President Trump froze all US aid to South Africa, citing unsubstantiated claims of rights violations and genocide against Israel. South Africa dismissed the decision as factually inaccurate and reiterated its diplomatic stance. The executive order also proposes the resettlement of White Afrikaans farmers in the US, a move criticized by Pretoria amid Trump’s strict immigration policies.
Fitch downgraded Mozambique’s long-term foreign currency debt rating to CCC from CCC+ due to unresolved political unrest and fiscal challenges. The fiscal deficit widened to 6.5% of GDP in 2024, driven by revenue shortfalls and cutbacks in public spending. Fitch warned that the country’s reliance on short-term financing poses risks to domestic debt servicing.
President Trump froze all US aid to South Africa, citing unsubstantiated claims of rights violations and genocide against Israel. South Africa dismissed the decision as factually inaccurate and reiterated its diplomatic stance. The executive order also proposes the resettlement of White Afrikaans farmers in the US, a move criticized by Pretoria amid Trump’s strict immigration policies.
Crude oil prices declined to USD 70.7/barrel, heading for a third consecutive weekly fall after President Trump’s pledge to boost US oil production. The US also ramped up sanctions on Iran, limiting its oil flows, while Saudi Aramco raised March crude prices. US-China trade tensions remained, but the impact on oil was expected to be limited due to China’s small imports of US energy.
Euroclear will send a second tranche of EUR 2 bln to Ukraine, from profits generated by frozen Russian central bank assets. This follows a first payment of EUR 1.55 bln sent last July, after the EU passed legislation in support. The payment is expected to be sent in March.
China expressed support for South Africa’s presidency of the G20, with Ambassador Wu Peng discussing bilateral ties with South Africa’s Minister of International Relations. Meanwhile, US Secretary of State Marco Rubio announced he would boycott a G20 foreign ministers’ meeting over South Africa’s climate and diversity efforts.
Zambia is considering whether to continue its IMF program, set to expire in October 2025. The government remains committed to prudent economic management and fiscal discipline despite elections next year, with cabinet discussions expected before making a final decision.
The Trump administration is expected to present its plan for peace in Ukraine, next week at the Munich Security Conference. The plan may include measures to freeze the conflict, provide security guarantees for Ukraine, and the organization of elections. Ukrainian dollar bonds rallied in response.
In Serbia, Gazprom-owned refiner NIS has requested a 90 day postponement from the imposition of US sanctions, to find an acceptable solution to its ownership situation. The Serbian government has expressed strong support for this request, saying it it critically important for the country’s energy sector. Meanwhile, Serbia’s public debt-to-GDP ratio has narrowed slightly, to 47.4% at the end of December, compared to 48% a year earlier.
JPMorgan’s annual trading survey indicates inflation and tariffs will be key drivers of market volatility in 2025, with geopolitical tension also a factor. 41% of institutional traders expect increased volatility, which could boost trading in currencies like the Canadian dollar, Mexican peso, and offshore Chinese yuan.
McKinsey & Co. partners are debating the firm’s future in China due to escalating US-China tensions. While some suggest focusing on North American markets, Global Managing Partner Bob Sternfels argues for maintaining a global presence, reflecting broader concerns for multinational firms amid political strains.
Mongolia’s inflation rose to 9.0% YoY in December, from 8.1% the previous month, the highest reading since the end of 2023. In mid-January, large protests took place in Ulaanbaatar, with protesters voicing anger over a range of issues, from new taxes to high inflation.
Talks between President Trump and Israeli Prime Minister Netanyahu will shape Israel’s war against Hamas and Netanyahu’s political future. The second phase of the ceasefire and Israel’s claim of victory over Hamas are key topics, with Netanyahu balancing domestic goals and international diplomacy. Hamas spokesman Abdel Latif al-Qanua expressed concerns over Gaza’s reconstruction and humanitarian aid, as the conflict has devastated the region.
The US is considering Nicaragua’s future in the Dominican Republic-Central America Free Trade Agreement (CAFTA) due to its authoritarian government and rising migration. Secretary of State Marco Rubio signaled Nicaragua’s membership in the agreement is uncertain following US sanctions in May 2024.
Serbia’s credit rating was held by Fitch at BB+ with positive outlook, referencing strong growth, reduction in fiscal debt, and effective inflation management. These positive factors were counterbalanced by the assessment of domestic political risk, including the chance of early elections, relations with Russia and Kosovo, and challenges to the path of EU membership.
Kazakhstan’s current account deficit widened to USD 2.9 bln in the fourth quarter of 2024, from USD 0.3 bln the previous quarter. Further, the IMF as released its Article IV report on Kazakhstan, noting that economic growth has remained robust, with inflation easing, though structural reform implementation remains slow. It added that risks to the economic outlook are skewed to the downside, including potential effects of slowing global growth, intensification of regional conflicts, secondary sanctions, or commodity price and export disruption.
Serbian Finance Minister Mali has announced a reduction of tuition fees for students of 50%, though it is unclear if this announcement will quell the current student protests. Meanwhile, the Serbian economy grew 3.3% YoY in the final quarter of 2024, up from 3.1% YoY in the prior quarter. The country’s trade deficit widened by a fifth, to EUR 9.87 bln, at the end of last year, compared to a year earlier.
The Georgian central bank has maintained interest rates at 8.0%, for the fifth consecutive meeting. Inflation has remained below the central bank target of 3.0% for some time, with inflation reported at 1.9% in December 2024. The central bank reaffirmed its commitment to stability, stating that as domestic and geopolitical risks subside, the policy rate will gradually be moved towards its neutral level of 7.0%.
Russia continues to ship oil to India using vessels designated by the U.S. Treasury, testing sanctions enforcement. Crude shipments increased 11% to 3.07 mln barrels in the week ending January 26. India allows sanctioned tankers to dock if they loaded before January 10 and arrive by February 27.
In Serbia, the PM has resigned, as President Vucic continues to face challenges including large protests, initially about a deadly accident at a railway station, though fueled by anger over other issues. The impact on the broader government was unclear, though more cabinet resignations may follow, analysts said.
Mozambique’s central bank reduced its benchmark interest rate for the seventh consecutive time, lowering it from 12.75% to 12.25%. The bank also cut reserve requirements to stimulate the economy amid unrest following the contested October 2024 elections.
Bangladesh’s interest payments accounted for over half of government revenue in the first four months of FY 2024-25. With external debt exceeding USD 100 bln, Bangladesh is seeking loan term extensions and lower interest rates from China.
Rwanda’s USD bonds fell after a rebel group seized a key trading hub in the DRC. The bond price dropped to 84.3 cents, with the yield rising to 8.84%. Concerns over political and economic fallout, as well as potential sanctions, have contributed to the decline.
China’s factory activity slowed unexpectedly ahead of the Lunar New Year, with the manufacturing PMI dropping to 49.1, the lowest since August. The services sector also showed weakness. Economists suggest stronger fiscal stimulus is needed to address weak demand and trade challenges.
