4/29/16 CNN Money
It’s a tale of two economies for Latin America’s two largest countries.
Brazil is in a political crisis and severe recession. Its president, Dilma Rousseff, could be impeached this year. Brazil’s debt has also been downgraded to junk status.
Meanwhile, Mexico is growing, politics are relatively stable and its debt was upgraded in 2014.
“Right now Mexico and Brazil are as different as they come, this is day and night,” says Alberto Ramos, head of Latin America economic research at Goldman Sachs.
Those diverging narratives bore out Friday. Officials in Brazil announced that unemployment hitnearly 11% in the three months ending in March, way up from about 8% a year ago. Mexico’s unemployment rate is 3.7%.
Mexico’s economy grew 2.7% between January and March compared to a year ago, according to government figures released Friday. That’s even slightly better than what most economists expected.
That’s not stellar growth but it’s a lot better than Brazil’s economy, which shrank 3.8% in the fourth quarter last year and its central bank estimates the economy will contract 3.5% this year.