Economic Power In Latin America Shifting From Brazil To Mexico

202857618_223d565208_zForbes 10/9/2015

Over the last year three key factors have weighed heavily on Latin American economies: The end of the U.S. Fed’s quantitative easing, which has brought about less favorable international funding conditions;  the decline in commodity prices, which has depressed LatAm export revenues, and the Chinese economic slowdown, which also has hit commodity-exporting countries in the region.  As a result, economic growth this year has been a huge disappointment.  In January, the consensus forecast was for GDP growth of about 3%, but now expectations have fallen dramatically to a 0.4%contraction.

As a result of the appalling situation in Brazil, economic power in the region has shifted rapidly to Mexico, the second biggest economy in LatAm. Mexico’s growth has been hampered by the crash in oil prices but the economy is growing, by around 2% year-over-year, and the economic outlook is positive.  Solid domestic economic fundamentals, and my expectation of a resilient and improving U.S. economy over the next year, should help push Mexican growth towards 2.5%.

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Global economic slowdown continues to weaken LatAm economies

8/10/15 Daily Times

latin_americaMEXICO CITY: Global economic slowdown and weak economic recovery in the United States continue to threaten Latin American countries, raising the risks of capital flight and currency devaluation.According to the Economic Survey of Latin America and the Caribbean 2015 published recently by the Economic Commission for Latin America and the Caribbean (ECLAC), the region’s currencies have tended to weaken against the US dollar over the last year. The ECLAC attributed this depression to the withdrawal or slowing down of stimulus programs, the fall in prices of basic goods, the lower availability of capital in international markets, and the overall regional economic slowdown. “We cannot see the light at the end of the tunnel,”Alicia Giron, a researcher at the Institute of Economic Investigations of the National Autonomous University of Mexico, told Xinhua.

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Upcoming Event! Economics and Transparency: Meeting the Challenge in the Americas

justice - gavel and bookWHEN: Tuesday, June 9, 1:30-5:00pm

WHERE: 6th Floor Auditorium, Woodrow Wilson International Center for Scholars


Throughout much of Latin America, the “golden years” of economic growth during the last decade’s commodity boom have given way to economic decline or stagnation. At the same time, a mobilized citizenry is demanding better government performance. These two factors have focused unprecedented attention on rule of law deficits and official corruption. Meanwhile, relations among countries of the hemisphere have grown more complex. As much as the region has welcomed the normalization of U.S.-Cuban relations, the options for international insertion now extend far beyond the Western Hemisphere.

1:30-1:45pm: Keynote Remarks
The Honorable Juan Gabriel Valdés, Ambassador of Chile to the United States

1:45-3:15pm: Combatting Corruption and Building the Rule of Law
Alejandro Ponce, World Justice Project

Carlos Fernando Chamorro, Confidencial, Nicaragua

Eduardo Bohórquez, Transparencia Mexicana

Paulo Sotero, Director, Brazil Institute, Wilson Center

Daniel Zovatto, IDEA Internacional, Costa Rica

3:15-4:30pm: Hemispheric Relations in Leaner Times: What is the Path Forward?
Ambassador Gil Rishchynski, Ambassador of Canada to the United Nations

Roberto Russell, Universidad Torcuato di Tella, Argentina

Richard Feinberg, University of California, San Diego

Maria Hermínia Tavares de Almeida, Centro Brasileiro de Analise e Planejamento, São Paulo

Cynthia Arnson, Director, Latin American Program, Wilson Center

4:30-5:00pm: Closing Keynote
The Honorable Roberta Jacobson, Assistant Secretary of State for Western Hemisphere Affairs

*There will be a live webcast of this event. 

AT&T Prowling for More Latin America Deals After DirecTV

10/08/14 Bloomberg

globe - south america - connections to worldEven after buying DirecTV and its 18 million subscribers in Latin America, AT&T Inc. (T) is on the lookout for more acquisitions in the region, which is growing 10 times faster than the U.S. The $48.5 billion takeover — inching closer to completion after DirecTV shareholders voted in favor — will give AT&T satellite-TV subscribers across Latin America, particularly in Mexico and Brazil. The deal will mark AT&T’s first push outside the U.S. in more than a decade, expansion that is crucial to driving growth as the domestic wireless industry becomes more saturated, according to Fitch Ratings.

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Mexico joins Latin American stock market (Mila)

08/19/14 BNAmericas

latin_americaLatin American regulators and the Inter-American Development Bank (IDB) have announced the addition of Mexico to the integrated Latin American stock market (Mila).

Following two days of meetings in Mexico and several months of discussions, supervisors from Chile, Colombia, Peru and Mexico signed a cooperation agreement aimed at joining the Mexican stock market to Mila.

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Kerry off to Mexico for Talks on Venezuelan Crisis

mexico-usa-flag-montageABC News, 05/21/14

The State Department said Wednesday the U.S. may have to take a larger role in trying to ease the crisis in Venezuela if a South American effort to broker talks between the government in Caracas and the opposition remains stalled. U.S. Secretary of State John Kerry was headed to Mexico to discuss potential next steps with officials there.

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Mexico’s reversal of fortune

Ancient Mayan pyramid, KukulcanReuters, 01/17/2014

In Latin America, this looks to be the year of Brazil — thanks to the impending World Cup and presidential elections. But with another lackluster year looming in emerging markets, fans of transformation, growth and investment potential should instead look to Mexico.

Brazil’s president, Dilma Rousseff, is expected to win a second term this year, and its soccer team stands a good shot at victory. But growth has slowed considerably. In the world’s seventh largest economy, reforms are stagnating and the country faces a possible ratings downgrade.

Mexico, by contrast, is in the throes of serious reforms. It will likely lead Latin America with at least 4 percent growth this year and an improving investment outlook. Standard & Poor’s recently boosted Mexico’s credit ratings because of energy reforms that the rating company trumpeted last month as a “watershed moment” for the country. It is becoming a story of inverted fortunes, as Michael Shifter and Cameron Combs of the Inter-American Dialogue recently wrote.

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