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Latin America shows a "heterogeneous" economic evolution this year, with brakes in Argentina and Brazil and a stronger recovery in Mexico and the Andean region, despite the dreaded rise in rates of inflation. interest in the United States. BBVA Research to degrade forecasts for the region.
The region "will grow by 1.3% in 2018 and by 2.1% in 2019 with a fairly high degree of heterogeneity among countries", states the document "Latin America", in which it emphasizes that these figures represent a downward adjustment of 0.1% and 0.5%, respectively, on its projection three months ago.
The adjustment is attributed in particular to the examination of the growth of Argentina – from 2.6% to 0.5% in 2018 – "due to the crisis of the rates of foreign exchange and the most restrictive economic policies "; and Brazil – from 2.1% to 1.6% this year – due to "financial instability, the carriers strike, a weaker government" and "political uncertainty".
For the BBVA research group, this movement is not able to fully offset the upward revisions in growth forecasts in Mexico, Colombia, Peru and Paraguay, triggered by the good activity data observed in the first half of the year ".
the report anticipates that the region is facing a global scenario "subject to mainly negative risks, which have increased in recent months", marked by a trade war for the measures adopted by the United States. and China's answer.
"New protectionist threats add to the interests of important sectors in other regions, such as the automotive sector in Europe, Mexico, Canada or Japan," he says. 19659007]. In this context, BBVA Research expects a gradual depreciation of exchange rates in the region, "in line with the rise in interest rates" of the US Federal Reserve, a rise that raises fears in Latin A "The main exceptions could be observed in Mexico and Brazil, where an appreciation of their exchange rates would be possible before the ratification of the NAFTA (North American Trade Treaty) and less political uncertainty" he adds. 19659002] With this panorama, the group of investigators believes that the growth of Latin America "in the next two years will continue to support in the external sector and in the impetus of investment ".
As for the internal coyun, for the agency "the greatest political noise is a risk in Brazil in the pre-election context", before the presidential elections next October.
While in the Andean countries, "the recovery was favored by high prices of the main raw materials for export, but also for greater political calm after the electoral process in Colombia and the change of government in Chile and Peru. "
Tuesday, the International Monetary Fund (IMF) has projected a tough recovery" for some of the most powerful economies in Latin America, a region for which it has lowered its growth forecasts to 1 , 6% in 2018 and 2.6% in 2019, 4 and 2 tenths less than what was calculated in April.
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