Latin America Monitor RSS Feed

Price Freezes To Remain Ineffective (Latin America Monitor - Southern Cone)

Mon, 20 May 2013 00:00 GMT

We believe that price freezes implemented in Argentina this past February have done little to impact either price growth or public expectations about inflation over the next 12 months. As such, we expect these policies will ultimately prove ineffective, and inflation will continue to weigh on the popularity of President Cristina Fernández de Kirchner and her ruling Frente Para la Victoria wing of the ruling Peronist coalition.

Scandal To Provide Additional Headwinds For Chinchilla (Latin America Monitor - Central America)

Fri, 17 May 2013 00:00 GMT

The most recent scandal affecting Costa Rican President Laura Chinchilla's administration underscores our long-held view that she is likely to remain highly unpopular in the coming months as she struggles to regain public confidence. We also see potential for this incident to negatively impact the chances of the ruling Partido Liberación Nacional and presidential frontrunner Johnny Araya in the February 2014 general election.

Strong Capital Inflows To Cover CA Deficit (Latin America Monitor - Southern Cone)

Wed, 15 May 2013 00:00 GMT

While we expect weakening goods and services balances to widen Uruguay's current account deficit, we believe the financial account will more than cover the shortfall. Indeed, Uruguay remains an attractive destination for direct and portfolio investment, a trend we expect will continue over the medium term.

Humala Unlikely To See Scrutiny Ease (Latin America Monitor - Andean Group)

Thu, 16 May 2013 00:00 GMT

Peruvian President Ollanta Humala's administration has come under pressure from domestic and international stakeholders in recent months on the back of issues such as rising crime, government intervention in the economy and diplomatic relations. With the government on the defensive, and slowing growth likely present another challenge in the coming months, we expect the Humala administration's policies to remain under significant scrutiny.

Mining And Services Sectors To Offset Sugar's Decline (Latin America Monitor - Caribbean)

Tue, 14 May 2013 00:00 GMT

Following strong real GDP growth in 2012, we have revised up our 2013 and 2014 growth forecasts for Guyana. While we believe the sugar industry will struggle in the coming years, greater upside potential for the mining, services and rice sectors will bolster economic activity, underpinning the recent upgrades to our forecasts.

Goods Surplus Contraction To Continue (Latin America Monitor - Southern Cone)

Mon, 13 May 2013 00:00 GMT

In line with our expectations, Argentina's goods trade surplus continues to fall in year-on-year terms. While we believe base effects and a currency devaluation this year will help exports return to positive growth in the months ahead, we continue to expect imports to outpace exports in 2013, narrowing the goods trade surplus to 3.2% of GDP this year from 4.0% of GDP in 2012.

Investment-Driven Growth Set To Moderate (Latin America Monitor - Andean Group)

Wed, 24 Apr 2013 00:00 GMT

Peruvian economic activity data has started to show some weakness in recent months, supporting our view for a notable slowdown in growth in the latter half of 2013. Indeed, we maintain our below-consensus real GDP growth forecast of 5.4% this year, largely on the back of our view that a slowdown in China will feed through to weaker exports and fixed investment in Peru in the next 12 months.

Energy Sector Rebound To Drive Stronger Growth (Business Monitor Online)

Thu, 02 May 2013 00:00 GMT

We maintain our view that Trinidad & Tobago will see stronger economic activity in 2013 on account of a pick-up in private consumption, financial sector reforms, and a return to growth for the energy sector. As such, we forecast real GDP growth to come in at 2.5% this year, up from 1.2% in 2012. That said, our mixed outlook for the energy sector beyond 2013 will prevent growth from rapidly accelerating over the medium to long term.

Reforms To Cast Pall Over 2014 Election (Latin America Monitor - Central America)

Wed, 01 May 2013 00:00 GMT

Despite opposition legislators' stringent resistance to recent amendments to Panama's electoral code, the changes are unlikely to have a substantial effect on the overall outcome of the 2014 legislative elections. That said, the timing of the changes could cast a pall over voter perceptions of the fairness of the election.

Reform Drive To Continue Despite Scandal (Latin America Monitor - Mexico)

Fri, 26 Apr 2013 00:00 GMT

Mexican President Enrique Peña Nieto appears to have smoothed over tensions with the main opposition parties in the wake of a local election funding scandal. However, we see this scandal as having weighed on the president's political capital, and with the biggest challenges still ahead of him in the form of energy and fiscal reform, we note that political negotiations in the second half of this years are likely to be far more fraught than they have been thus far.

Decade-Long Decline In Manufacturing To Continue (Latin America Monitor - Caribbean)

Thu, 11 Apr 2013 00:00 GMT

We believe that Puerto Rico's uncompetitive labour market, particularly in the manufacturing sector, will remain a major drag on economic growth over a multi-year period. Indeed, relatively high minimum wages, combined with declining labour force participation, which will see a loss in skill sets, will weigh heavily on economic activity.

Early Elections Threaten Fiscal Consolidation (Latin America Monitor - Caribbean)

Thu, 25 Apr 2013 00:00 GMT

We believe that a recent parliamentary vote of no confidence in Saint Kitts and Nevis against Prime Minister Douglas Denzil paves the way for legislative elections, previously scheduled for 2015, to be held this year. This development could threaten the government's commitment to fiscal consolidation in the short term. However, a likely shift to a new government, untainted by allegations of corruption, could lead to increased foreign investment, bolstering the islands' long-term growth prospects.

Pharmaceutical Market Forecast Revised Down (Latin America Monitor - Central America)

Thu, 11 Apr 2013 00:00 GMT

BMI View: Commercial incentives for foreign drugmakers to expand in Guatemala's pharmaceutical market are limited by the country's low per capita pharmaceutical spending and market growth. However, we believe that Guatemala will continue to attract investment as a regional pharmaceutical production hub. Since the end of the 36-year civil war in 1996, Guatemala's political stability has been progressing and tax incentives are available to encourage foreign investment. The key risks to this projection are: high levels of bureaucracy, corruption, the complex judicial system and low security due to non-political violence.

Increasing Risk Of Macroeconomic Instability (Latin America Monitor - Central America)

Thu, 02 May 2013 00:00 GMT

As Venezuela's political environment begins to deteriorate rapidly, we see increased risks to Nicaragua's macroeconomic stability given the strong political and trade ties between the two countries. Indeed, while our core view remains that we will not see a major shift in Venezuelan policies toward Nicaragua, we note that the very narrow win by Venezuela's ruling party in April election increased the potential for instability in both countries.

Unyielding Investment To Sustain Growth (Latin America Monitor - Andean Group)

Fri, 05 Apr 2013 00:00 GMT

Despite Bolivia's poor business environment, foreign investment in the country's extractive sectors has remained strong, leading us to revise up our 2012 real GDP estimate to 4.8%, and our 2013 forecast to 4.6%. Furthermore, we believe a continued rise in natural gas exports and low inflation will support expansionary fiscal and monetary policies, keeping growth above 4.0% over our forecast period.