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  • ECONOMIC HIGHLIGHTS

    Abbi Dicker 21 February 2025 Hits: 3965

    MEXICO | Growth in international tourism in 2024. On 11 February Mexico’s national statistics institute (Inegi) announced that the country received 45.04m international tourists in 2024, marking a 7.4% annual increase. Revenue from international tourism also rose by 5.9% to US$30.25bn. In December, 4.79m international tourists visited Mexico, representing a 4.3% year-on-year increase, while revenue totalled US$3.42bn, up 7.6%.

    MEXICO | Vehicle sales rise, exports decline in January. On 10 February Mexico’s national statistics institute (Inegi) reported that 119,811 light vehicles were sold in the domestic market in January, reflecting a 5.9% increase compared with the same month in 2024. Vehicle production also saw a modest rise, with 312,257 light vehicles produced in January 2025, representing a 1.7% increase year-on-year. However, exports fell 13.7%, with Mexico exporting 219,414 light vehicles in the first month of the year, nearly 35,000 fewer than in January 2024.

    MEXICO | Inflation slows in January. On 7 February Mexico’s national statistics institute (Inegi) released the consumer price index (INPC) for January, reporting a monthly inflation rate of 0.29%, down from 0.38% in December and marking the third consecutive month of decline. This brings the annual headline inflation to 3.59%. The figure is down from annual inflation of 4.21% recorded at the end of 2024 and marks the lowest rate since January 2021 (3.54%).

    MEXICO | Banxico cuts interest rate. On 6 February Mexico’s central bank (Banxico) lowered its benchmark interest rate by 50 basis points to 9.50%, marking its fifth consecutive rate cut and the first of this scale in the current cycle. The governing board signalled that further rate cuts of a similar magnitude could be considered, provided inflation stays on course to reach the 3% target.

    Mexico: GDP growth
    Percentage variation (year-on-year)

    Mexico: unemployment rate
    Economically active population

    Mexico: inflation rate
    Percentage variation (year-on-year)

    Source (all graphs): National Statistics Institute (Inegi)

  • CHILE: Grau’s to-do list

    Abbi Dicker 28 August 2025 Hits: 2771

    Nicolás Grau, who was appointed last week as Chile’s new finance minister after the resignation of Mario Marcel, faces a challenge: managing the economy for the government’s remaining seven months in office and preparing a workable budget for 2026.

    Grau, who had been serving as economy minister, has some important deadlines to meet. He must submit a full 2026 budget to congress by the end of September. He must also steer a steady economic course through the presidential and congressional elections on 16 November and the swearing-in of a new government on 11 March 2026. It is probable that the right-wing opposition will defeat the incumbent ruling left-of-centre coalition: Grau will therefore have to deal with a politically complex transition.

    In an interview after his appointment, Grau (who previously served as economy minister for three years) argued that Chile’s long-term economic growth rate, which currently stands at around 2%, needs to be lifted through a series of structural reforms. In his view the outgoing government made progress, having delivered on pension reform, and advances in regulating lithium mining and green hydrogen generation.

    Grau also highlighted a new draft law on sectoral permits designed to speed up project approvals. By running permits in parallel, rather than sequentially, the government believes the time required for project approvals can be cut by 30%-70%.

    Grau thinks in his short term in office he will be able to boost employment levels. He says that unemployment, currently at 8.9%, is too high. He claims that the government has created over half a million new jobs, most of which are formal. The overall informality rate has dropped from 29% to 26%. The challenge, he says, is to keep creating formal jobs and eliminating informal jobs, but at a faster rate. This he describes as “economically the most important outstanding thing for the government”.

    The reality is that with seven months to go, Grau will be unable to launch ambitious new projects. He will have a major job on his hands setting the budget for 2026 and will be subject to intense political scrutiny for any impact his decisions may have on the electoral campaign.

    Grau inherits a government promise to limit the structural budget deficit to not more than 1.1% of GDP, while holding the debt-to-GDP ratio at no more than 43.9%. The question is: how much government spending is compatible with those targets?

    Vittorio Corbo, a former governor of the central bank, says overall public spending growth needs to be kept to 1%-2%. In contrast Matías Acevedo, an academic economist at the private Universidad de los Andes (Uandes) in Santiago, says spending must actually contract by 1%-2% and be fine-tuned to the achievement of revenue targets. Carlos Smith, of the private Universidad del Desarrollo (UDD) in Santiago, says spending should be cut by 1%, commenting “this is really difficult, there is not much political space for that to happen…what this government can achieve is complicated, I’m not sure if the minister can do it”.

    Grau lectured over budget

    Opposition economists have also weighed in. Frank Sauerbaum of the traditional right-of-centre party Renovación Nacional (RN) has called for an “austere” budget and for Finance Minister Nicolás Grau to “be responsible” and limit spending growth to not more than 2%. The new minister has begun a round of meetings with members of congress to discuss the budget bill.

  • TRACKING TRENDS

    LatinNews 06 September 2011 Hits: 3590

    ARGENTINA | Minimum wage and inflation. The government has increased the minimum wage by 25% to Arg$2,300 (US$518) a month. The scale of the increase is further confirmation that inflation, despite the government’s persistent denials, is running at much the same level, rather than the massaged official figures (just 5.5% for the first seven months of the year) released by the national statistics institute (Indec). President Cristina Fernández claimed that the increase rewarded hardworking Argentines with greater purchasing power (although their new wages will only keep pace with unofficial inflation), which is important less than two months before general elections. Trade unions thrash out annual agreements over revisions to the minimum wage with employers. The fact that neither of them uses official inflation as a reference for negotiations was underscored by the fact that the unions pushed for a 41% increase, and businesses started with an opening gambit of 18%.

    PARAGUAY | Brasiguayos out! Thousands of landless peasants marched on Asunción on 30 August to demand that the government of President Fernando Lugo purchase or expropriate some 12,000 hectares of land in the districts of Ñacunday, Santa Rosa and Santa Rita, in the border region of Alto Paraná. The land is currently divided into large plantations run by local farmers of Brazilian origin, or brasiguayos. The peasants argue that brasiguayos have over the years ‘acquired’ titles to some 28,000 hectares of state land in the region. Most of this land is now planted with soya, Paraguay’s main export. A proposal by the Lugo government to re-purchase some 22,000 hectares of local land for redistribution to the landless remains stalled, amid allegations of irregularities in the process. The peasants also want the removal of local judges who they accuse of favouring the private landowners. The Liga Nacional de Carperos (LNC, the National League of Tent Dwellers), which organised the march, said 10,000 attended. The police put it at 6,000.

  • RASTREANDO TENDENCIAS

    LatinNews 02 April 2013 Hits: 1106

    PERÚ | El gobierno ordena realizar limpieza a Pluspetrol. El ministro del medioambiente de Perú, Manuel Pulgar-Vidal, anunció el 25 de marzo que el gobierno había ordenado a la compañía petrolera argentina, Pluspetrol, que haga la limpieza de la cuenca del Río Pastaza, localizada cerca de la frontera con Ecuador, y sobre la cual los indígenas se quejan que han sufrido del daño medioambiental que siguió a un supuesto derrame de petróleo el año asado. De acuerdo con Pulgar-Vidal, el gobierno peruano ahora había declarado un estado de emergencia medioambiental  en la remota región amazónica de Loreto, donde se sospecha que los pozos operados por Pluspetrol han estado contaminando el ambiente durante años, por tanto, los expertos pueden ir al área a corroborar la extensión del daño ambiental.

    Hablando en una radio local, Pulgar-Vidal dijo que el gobierno ya está preparando un plan de saneamiento y rehabilitación para el área, declarando que el Estado ahora ha decidido intervenir en la materia después de confirmar la carencia de Pluspetrol de estándares medioambientales en sus operaciones en Perú. Pluspetrol ha estado explotando pozos petrolíferos en la cuenca del Río Pastaza desde el 2001, después de adquirir los activos peruanos de una firma de EU, Occidental Petroleum. De acuerdo con Pulgar-Vidal la compañía ya había sido advertida sobre sus negligentes prácticas medioambientales entre el 2003 y el 2005, cuando se le pidió a Pluspetrol que produzca mejoras en ese sentido. Aunque la compañía acordó conducir voluntariamente un plan ambiental complementario (PAC), Pulgar-Vidal ha dicho que éste había sido llevado a cabo "inadecuadamente". El PAC requiere de Pluspetrol que cumpla con una serie de requerimientos que ayudarían a promover la rehabilitación medioambiental de las áreas donde las concesiones petroleras estaban ubicadas, dando a la firma hasta el 2009 para cumplir con todas esas exigencias.

    Después de conducir una extensa revisión de las acciones de Pluspetrol, la agencia auditora de evaluación medioambiental de Perú (Oefa) halló que la firma no había cumplido con todos  los requerimientos exigidos en el PAC y como resultado, Oefa emitió una multa de PEN29m (US$11,37m) a Pluspetrol en enero último. Pluspetrol ha reconocido que no logró implementar todas las provisiones del PAC, pero rehusó pagar la multa alegando que había solicitado al gobierno peruano en repetidas ocasiones que revea los requerimientos del PAC, que la firma consideraba demasiado exigente.

    La última decisión del gobierno peruano sugiere que su paciencia con Pluspetrol ha terminado. Hasta ahora, la decisión del gobierno de intervenir ha causado diferentes reacciones, con Sixto Shapiama, el presidente de la federación Quechua de Pastaza, una organización indígena local, saludando la declaración del estado de emergencia como un gran logro; otros señalan que el gobierno ha tardado mucho tiempo para tomar acción.

    El gobierno peruano ha tomado tiempo para reconocer la severidad de la situación y sólo recientemente decidió cambias su posición sobre Pluspetrol. En el 2010, trató de expulsar al activista religioso británico, Paul McAuley, que había estado creando conciencia sobre el daño ambiental que se infligen en la zona y sus habitantes por las actividades de Pluspetrol. Los intentos de expulsar a McAuley fueron abandonados sólo después que ellos lograron provocar una campaña global en apoyo del activista y su causa.

    VENEZUELA | Difunden datos sobre desempleo de febrero. El instituto nacional de estadísticas (INE) de Venezuela, reveló el 25 de marzo que el desempleo en febrero estaba en 7,6%, o 1,6% menos que en febrero del 2012. El resultado es una mejora sobre la tasa de desempleo de enero, que se mantuvo en 9,4%. El residente del INE, Elías Juri, atribuyó la caída  en el desempleo "al hecho que las dinámicas que conforman la economía venezolana están enfocadas en las necesidades de su población más que en su capita". Y también mencionó que "los cambios que fueron hechos al monto del crédito disponible en la economía y la nueva tasa de cambio no ha influenciado en la capacidad de la economía venezolana para emplear fuerza de trabajo". de acuerdo con las cifras difundidas por el INE, durante febrero el empleo formal corresponde al 59,1% del monto total mientras que el empleo informal representa 40,9% del total.

    Las cifras del derivan de su sondeo mensual de 5.998 hogares. La dimensión de la fuerza laboral total de Venezuela para el 2012 ha sido fijada en 13,7m de personas, sobre una población total de 28,45m de habitantes.

    BOLIVIA | Acuerdo de exploración conjunta YPFB-YPF. La firma estatal de petróleo y gas de Bolivia, YPFB, anunció el 26 de marzo que había firmado un memorándum de entendimiento con la firma petrolera controlada por el estado, YPF, para conducir esfuerzos conjuntos de exploración de hidrocarburos en Bolivia. Una declaración de YPFB expresa que el acuerdo a tres años permitirá a ambas firmas aprovechar la ventajes de sus "experiencias técnicas y know-how conjuntos para promover el desarrollo de proyectos de exploración y desarrollo en áreas de depósitos de hidrocarburos con el potencial de explotación convencional y no convencional." De acuerdo con Carlos Villegas, el presidente ejecutivo de YPFB, el acuerdo permitirá el inicio de los esfuerzos de exploración en tres nuevos bloques en Bolivia, aunque no mencionó con precisión donde estarán localizados esos bloques.

  • ECONOMIC HIGHLIGHTS

    Abbi Dicker 19 March 2026 Hits: 1630

    COLOMBIA | Petro insists on minimum wage hike. On 19 February Colombia’s President Gustavo Petro issued a decree reinstating the 23.7% increase to the minimum wage which was suspended on 13 February by the Consejo de Estado, the country’s top administrative court. The court had said that the government had not justified the increase in sufficiently detailed macroeconomic terms. The new wage has been welcomed by trade unions but received a mixed response from business lobbies. Petro announced the new decree as he addressed a pro-government demonstration in the capital Bogotá, amid mobilisations around the country in support of the higher minimum wage. Petro told the crowd that “this is the first living wage in the history of Colombia, or at least since the 1991 constitution” which the government is also aiming to reform. The new minimum wage is Col$1.75m (US$474) per month, with an additional transport subsidy for lower earners of Col$249,000, which was raised by 24.5%.

    VENEZUELA | New hydrocarbons minister. On 11 March Venezuela’s President Delcy Rodríguez appointed Paula Henao as hydrocarbons minister, a role Rodríguez had been carrying out herself since August 2024. Henao, who was previously deputy oil minister, has spent most of her career as an oil engineer at state oil company Petróleos de Venezuela (Pdvsa) and led projects at the company’s research institute, its Orinoco oilfields, and offshore. Venezuela’s oil production increased in monthly terms in February but remains lower than it was in December 2025 shortly before the US capture of Rodríguez’s predecessor Nicolás Maduro (2013-2026). Venezuela claimed to have produced 1.02m barrels of oil per day (bpd) in February, up from 924,000 bpd in January but lower than the 1.12m bpd it reported in December. An estimate from the Organization of the Petroleum Exporting Countries (Opec), based on secondary sources, put Venezuela’s February production at 903,000 bpd, up from 823,000 bpd in January but lower than its estimate of 917,000 bpd in December.

    Andean countries: inflation rate
    Percentage variation (year-on-year)

    Andean countries: GDP growth (%)
    Quarterly figures are year-on-year growth

  • RASTREANDO TENDENCIAS

    LatinNews 15 October 2012 Hits: 596

    REGION | Chile lideraría el crecimiento económico. De acuerdo con el último pronóstico del Informe del Panorama Económico Mundial del Fondo Monetario Internacional (FMI) difundido el 8 de octubre, Chile liderará la marcha en el Cono Sur este año con una tasa de crecimiento proyectado del 5%. De hecho, Chile fue el único país en la sub-región en el cual el FMI revisó hacia arriba su pronóstico de crecimiento (del 4,3%) desde su último pronóstico difundido en julio. En contraste, el FMI revisó hacia abajo sus pronósticos para las dos más grandes economías en el Cono Sur: Brasil y Argentina. El Fondo ahora cree que Brasil cerrará este año con un crecimiento del 1,5%, cayendo del 2,5%. Ahora se espera que Argentina logre un 2,6% de crecimiento, cayendo del 4,2%. Los pronósticos para las dos economías restantes en la región, Uruguay y Paraguay, permanecen sin cambios, con proyecciones del 3,5% y el -1,5% respectivamente.

    El FMI dijo que la revisión hacia abajo en Argentina y Brasil podría ser atribuida al hecho de que ambas economías han sufrido la crisis económica global en curso y la persistente incertidumbre en los mercados económicos. Sin embargo, se podría decir que estos factores también deberían haber afectado negativamente el desempeño económico de Chile. Pero aún así, la economía chilena ha estado registrando impresionantes cifras, mostrando una enorme capacidad de recuperación, y al parecer se dirige a casi igualar su tasa de crecimiento del 5,9% registrado el año pasado.

    Mientras que el desempeño económico es afectado por un número de factores, es importante señalar que de los cinco países que conforman la sub-región del Cono Sur, Chile es el único que no es miembro del bloque comercial del Mercado Común del Sur (Mercosur), y eso tal vez provea una explicación plausible acerca del porqué la economía chilena ha logrado tener un mejor desempeño que sus vecinos este año. Desde el año pasado, el comercio dentro del Mercosur ha sufrido, pues ambos, Brasil y Argentina, se han empeñado en prácticas proteccionistas, imponiendo barreras al comercio, inclusive dentro del bloque. Los fuertes lazos económicos entre los cuatro mercados del Mercosur significan que esto ha afectado significativamente el desempeño de sus economías. Chile es mucho menos dependiente del comercio con el Mercosur.

  • TRACKING TRENDS

    LatinNews 10 January 2013 Hits: 1091

    CHILE | Fine fettle. For the second straight year the economy has grown faster than public spending, the finance minister, Felipe Larraín, announced last week. Public spending increased by 5% while GDP expanded by 5.5%, according to Larraín. He said the figures had been released concurrently to inform the market more accurately about the real state of affairs in Chile, and in advance because analysts have been maintaining that public spending grew by some 7%.

    Chile finished 2012 with a trade surplus of US$4.21bn, down by 61% on the previous year, according to the central bank. Total exports amounted to US$78.81bn, down 3.2% on 2011, while imports grew by 5.6% to US$74.60bn to reach their highest level for 10 years. The main reason for the fall in exports was the slight decline in Chile’s principal export, copper. Copper exports totalled US$42.72bn in 2012, down 3.85% on 2011.

    There are signs that Chile’s trade surplus could recover to 2011 levels this year. In December, Chile posted its second straight monthly surplus following four consecutive deficits. December’s trade surplus was US$1.51bn, the largest monthly trade surplus for more than a year, compared with US$1.12bn in the same month in 2011. Exports of copper bounced back to US$4.70bn in December, the highest level in two years.

    Despite the broadly positive economic statistics, especially in the face of a turbulent global economy, the Chilean public, to the sporadically visible frustration of President Sebastián Piñera, is not overly impressed with the government’s stewardship of the economy.

    The most prestigious public opinion survey by CEP, which was released at the turn of the year, showed that while Piñera’s popularity had climbed by four percentage points since the previous poll in August it is still just 31%.

    Piñera’s predecessor Michelle Bachelet (2006-2010) is the outstanding favourite to return to power in elections this November with the opposition Concertaciόn, according to the survey: 54% of respondents said they would vote for her despite the fact she has not formally confirmed that she will run.

    Bachelet’s prospective opponents from the ruling Coalición por el Cambio, Laurence Golborne and Andrés Allamand, who will stand against each other in primary elections, only managed 22% between them. Marco Enríquez-Ominami, who finished a very creditable third in the last elections after leaving the Concertaciόn and running as an independent, was on 8%.

    PARAGUAY | Exports hold strong. Paraguay’s exports to the Southern Common Market (Mercosur) between July last year and November increased by 30% compared with the same period a year earlier to US$626m. This period followed directly after Paraguay’s suspension from Mercosur because of the impeachment of President Fernando Lugo by congress. Brazilian officials cited by Folha de São Paulo said the trade figures confirmed that the suspension of Paraguay was entirely a political matter and that it had had no impact whatsoever on trade. Paraguay’s exports over the same period to Venezuela, which was admitted to Mercosur in the wake of Paraguay’s suspension, fell from US$60m to just US$3m.

    URUGUAY | Inflation success. It is far too early to suggest that the government has managed to get a firm grip on what President José Mujica famously described as a slippery eel, but inflation has not been allowed to wriggle up to double-digits as feared.

    The consumer price index (CPI) fell 0.73% in December, bringing accumulated inflation to 7.48% in 2012, according to the national statistics institute (INE). Although inflation neither reached double digits nor indeed its level in 2011, 8.60%, it remained far in excess of the ambitious 4%-6% target set for the year.

    ARGENTINA | Record tax take. The tax take in 2012 reached a record Arg$679.8bn (US$138bn), up 25.9% on the previous year, according to the director of the tax agency (Afip), Ricardo Echegaray.

    Echegaray maintained that the primary reason for the boost was salary increases (personal income tax grew 35.1% to Arg$69.5bn [US$14bn]) and strong growth.

    Echegaray, whose post as the head of the Afip was renewed in late December by the government for a further four years, said he was expecting the tax take to reach Arg$850bn in 2013.

    Football tax

    The director of Argentina’s tax agency (Afip), Ricardo Echegaray, introduced new measures at the turn of the year to clamp down on tax evasion in football. Henceforth, all of Argentina’s football clubs will have to put profits from player transfers into special bank accounts. Player contracts will also have to be reported in addition to these profits, and investors and agents involved will have to be registered as representing the player. The Afip will block those responsible from the country’s financial system if the numbers fail to match up.

  • PARAGUAY: El Estado promete acción luego de asesinatos de alto perfil

    LatinNews 07 November 2014 Hits: 521

    Representantes del gobierno paraguayo, de la justicia y la legislatura se reunieron el 3 de noviembre para discutir medidas para combatir la influencia del tráfico de drogas en la política. El Presidente Horacio Cartes convocó a la reunión en el palacio presidencial, dos semanas después de los asesinatos de alto perfil de Pablo Medina, un periodista investigativo que trabajaba para el diario nacional, ABC Color, y su acompañante y asistente, Antonia Almada. Se cree, casi con seguridad, que Medina fue asesinado por sus investigaciones en el tráfico de drogas en la zona que abarcaban sus tareas.

    Vilmar Acosta, un alcalde de la gobernante Asociación Nacional Republicana-Partido Colorado (ANR-PC), actualmente prófugo, está bajo investigación sobre los asesinatos, luego del descubrimiento de tres toneladas de marihuana en la granja de su familia. Uno de los acuerdos anunciados después de la reunión en el palacio presidencial fue el compromiso de todos los partidos políticos de prohibir a candidatos sospechosos de estar involucrados en el tráfico de las drogas, aunque cómo se podrá lograr esto legalmente está abierto a preguntas.

    Otro resultado de la reunión fue el compromiso de llevar a la capital, Asunción, todas los casos judiciales relacionados al tráfico de drogas. “Los juicios en el interior del país son mucho más vulnerables [a las presiones],” dijo Hugo Velázquez, el presidente de la cámara de diputados, miembro de la ANR-PC.

    El fiscal general de Paraguay, Javier Díaz Verón, dijo que él también estaba examinando la forma de garantizar que los ingresos de los bienes incautados durante las investigaciones sobre el tráfico de drogas fueran inmediatamente a manos del Estado. “Este es un negocio, este es un delito, que afecta no solamente a individuos y a las autoridades civiles, sino que también corrompe la misma estructura del Estado”,  dijo Díaz.

    Medina y Alamada recibieron disparos el 16 de octubre mientras viajaban en el automóvil de Medina en el departamento de Canindeyú, fronterizo con Brasil en el este, una de las principales áreas de cultivo de la marihuana. La única sobreviviente del ataque, Juana Ruth Almada, hermana de Antonia, identificó a Wilson Acosta, hermano de Vilmar, como uno de los sicarios.

    • Marihuana

    Paraguay es el mayor productor de marihuana en Sudamérica, gran parte de la cual es introducida de contrabando en Brasil. Cuando Uruguay se convirtió en el primer país en el mundo en legalizar el cultivo, la distribución, la venta, y el consumo de marihuana el año pasado, algunos partidarios de la nueva ley citaron el crecimiento del cultivo de la marihuana y el tráfico desde Paraguay, como un ejemplo negativo que ellos estaban buscando evitar. El Presidente de Paraguay, Horacio Cartes, no está dispuesto a seguir el ejemplo de Uruguay, habiendo descartado la movida para legalizar las drogas como una “utopía”.

  • RASTREANDO TENDENCIAS

    LatinNews 10 July 2015 Hits: 636

    URUGUAY | Aguda caída de las exportaciones en el primer semestre. En los primeros seis meses del 2015 las exportaciones uruguayas cayeron un 15,7% año en año, a US$4,18mm, reveló el 1 de julio la Unión de Exportadores Uruguayos (UEU). El informe de la UEU señala que las exportaciones ahora han caído por siete meses consecutivos.

    La caída general en las exportaciones fue conducida por una aguda caída del 36,6% año en año en los embarques en junio. Todo esto fue atribuido a la caída del 54% en los embarques a China en el mes (-5,5% para el año) –que no obstante permanece como el primer mercado para las exportaciones uruguayas– esto con el trasfondo de la caída en las exportaciones de soja, carne, y productos lácteos. Pero también hubo una aguda caída en los embarques en el mes (-20,7% para el año) a Brasil, el segundo mercado más importante para los productos uruguayos en el exterior –debido a las menores ventas de trigo y productos plásticos. En contraste, las exportaciones a EU se incrementaron un 24,9% en junio debido a las mayores ventas de cítricos, mientras que las exportaciones a Finlandia se incrementaron un 18% gracias a la entrada en operaciones de la planta de celulosa UPM.

    El gobierno uruguayo intentó darle un giro positivo a los resultados de las exportaciones afirmando en una declaración oficial publicada el 2 de julio, que la “caída en las exportaciones es la más baja en la región”. La declaración está basada en un informe del instituto de promoción de la exportación y la inversión, Uruguay XXI, que se concentra en el periodo de mayo 2014-mayo 2015, levemente diferente al informe de la UEU. Durante ese periodo, las exportaciones en general de Uruguay cayeron en no más del 3,4%, comparado con un 14% en Argentina, un 12% en Brasil, un 11% en Paraguay, un 16,4% en Colombia, un 12,8% en Perú, y un 6,3% en Chile.

    PARAGUAY | Caída en las exportaciones hacen recortar el pronóstico de crecimiento. El 29 de junio el Banco Central del Paraguay (BCP) anunció en una declaración oficial que estaba revisando hacia abajo su pronóstico de crecimiento del PIB, del 4,5% al 4% para el 2015. La declaración del BCP dice que la revisión hacia abajo se explica primariamente por una producción eléctrica más baja de  lo esperado en las dos principales plantas hidroeléctricas y por exportaciones menores en general.

    El economista en jefe del BCP, Miguel Mora, explicó que al comienzo del año el BCP predijo que la producción en las plantas hidroeléctricas que Paraguay comparte con Brasil y Argentina (las cuales venden su superávit de producción a los países socios) se incrementaría un 5% este año, pero que la producción sólo se había incrementado un 0,5% hasta la fecha debido a los bajos niveles de agua. Mora dijo que la revisión también responde a la debilidad observada en el comercio exterior resultante de la caída de precios los precios internacionales de algunas de las principales exportaciones de materia prima del Paraguay (soja, carne, y maíz).

    De hecho, un informe del Centro de Análisis y Difusión de la Economía Paraguaya (Cadep), un think-tank local, publicó el 2 de julio halló que las exportaciones del país totalizaron US$2,93mm en enero-mayo, un 17% menor que los US$3,72mm registrados en el periodo comparable del año pasado. De acuerdo con el informe de Cadep, esta caída en las exportaciones se explica por las dificultades económicas relativas que afectan a los principales socios comerciales de Paraguay, lo que ha conducido a una menor demanda por los productos paraguayos. El informe de Cadep halló que las exportaciones a la Unión Europea (UE), el principal destino de las exportaciones para el periodo, cayeron un 27% año en año a US$653m; mientras que las exportaciones al Mercado Común del Sur (Mercosur), el segundo principal destino de la exportaciones en el período, cayó un 22% a US$613m.

    CHILE | Se incrementa el desempleo al declinar las manufacturas. El Instituto Nacional de Estadísticas (INE) de Chile publicó el 30 de julio su última serie de cifras económicas, que mostraron una marcada caída en la actividad del sector de manufacturas y un incremento marginal en la tasa nacional de desempleo. Según los datos del INE, la actividad manufacturera cayó un 3,3% mes en mes en mayo, la mayor caída desde agosto del 2014, y una contracción mucho más alta que el 1,2% predicho por los economistas locales. Esto ha llevado a una contracción acumulada del sector del 0,8% hasta ahora en este año, lo que ha sido tomado como un claro signo de que la economía interna no ha logrado recuperarse totalmente de la desaceleración que ha estado sufriendo desde el año pasado, pese a la adopción de políticas fiscales y monetarias expansivas por parte de las autoridades chilenas.

    Más preocupante para el gobierno liderado por la Presidenta Michelle Bachelet, es que las cifras del INE también sugieren que la desaceleración económica ahora también está derivando en la pérdida de empleos. De acuerdo con el INE la tasa de desempleo nacional de mayo fue del 6,6%, medio punto (0,5) porcentual más alta que en el mes anterior y más elevada que el 6,3% predicho por los analistas locales. Por otro lado, el banco central difundió el 6 de julio su índice mensual de actividad económica (Imacec), que anticipa el PIB, para mayo, el cual que también cayó un 0,8% en el mes, su más bajo resultado desde agosto del 2014. Esto ha conducido a que el ministerio de finanzas recorte su pronóstico de crecimiento económico para el año al 2,5%, mucho más bajo que el 3,6% pronosticado originalmente. El ministro de finanzas, Rodrigo Valdés, dijo que la cifra del Imacec “destaca la necesidad de poner [la promoción] del crecimiento económico al tope de la agenda [política]”.

    • S&P recorta el rating de Odebrecht

    La agencia internacional de ratings, Standard & Poor’s (S&P), ha revisado hacia abajo su rating de crédito corporativo de la compañía de construcción brasilera, Odebrecht, de ‘BBB’ a ‘BBB-’ con una perspectiva negativa. La decisión se produce como consecuencia del arresto del jefe ejecutivo (CEO) de Odebrecht, Marcelo Odebrecht, por su sospechado involucramiento en el esquema de corrupción descubierto en la firma petrolera estatal de Brasil, Petrobrás. S&P dijo que había decidido revisar hacia abajo el rating de la firma debido a los “riesgos reputacionales” relacionados con el arresto de su CEO y de otros cuatro ejecutivos. No obstante, S&P mantuvo el rating de ‘brAAA’ de Odebrecht en su escala de rating nacional, aunque la perspectiva ha sido cambiada de ‘estable’ a ‘negativa’.

  • CARIBBEAN POINTERS

    LatinNews 15 March 2017 Hits: 584

    *** CONTINUED GROWTH PREDICTED FOR JAMAICA. An International Monetary Fund (IMF) team visited Jamaica from 20 February to 3 March. The mission concluded that following seven consecutive quarters of growth, the economy is on track for 1.7% GDP growth in FY2016/17. Growth will improve further in FY2017/18 to 2.1%. Employment is said to be improving “steadily”, but it is still high at 12.9%. The FY2017/18 budget is projecting a primary surplus of 7% of GDP. On the external front, the current account deficit is down to around 3% of GDP.

    *** CARIBBEAN BRACING FOR INCREASE OF DEPORTEES FROM US. The prime minister of Antigua and Barbuda, Gaston Browne, has warned that deportations under the new US administration led by President Donald Trump are likely to increase.

    Following a summit in St Kitts in early March, Browne warned that the issue had economic consequences as well as security ones. He said: “I think from a security standpoint our major concern is the hardened criminals. Clearly [with] those who would have overstayed the issue now is to reintegrate them back into society, to find jobs for them. It means that economic growth would have to be a priority because we no longer just have to deal with school leavers, many of whom are struggling to get jobs in our respective countries, we have to now deal with the influx of deportees.”

    St Kitts and Nevis prime minister Timothy Harris added that the region was hoping for some sensitivity and help from the US in dealing with this influx, but he did not sound over hopeful of receiving this. He said: “Will we get help from the Trump administration? We will wait and see.”

    *** DOWNGRADE FOR BARBADOS. On 7 March, Moody’s Investor Service downgraded the long-term bond and issuer rating of Barbados to Caa3, saying: “We assess the likelihood of a credit event in the near-term as very high, given lack of fiscal adjustment and increasingly limited financing options.” The Moody’s downgrading followed a similar move by Standard & Poor’s a few days earlier and the firing of the central bank governor, DeLisle Worrell, on 24 February, which spooked financial markets. The yield on government bonds rose above 10% in response.

    At the end of 2016, the debt-to-GDP ratio was above 110%. The deficit for the fiscal year beginning this April is budgeted to be 4.4% of GDP.

    *** TOWARDS A CLOSE ELECTION IN THE BAHAMAS. The Bahamas will hold a general election within the next few months, and polls indicate a close result. According to private polling by the ruling Progressive Liberal Party (PLP), it has 14 seats marked down as wins against 11 seats marked down as wins for the opposition Free National Movement (FNM). It says that the remaining 14 seats could go either way.

    In the meantime, the IMF has said that the restarting of construction work at the troubled Baha Mar mega-resort should begin to boost economic growth. The resort is now due to open on 21 April.

    An IMF team was in The Bahamas from 7-13 December. It concluded that “structural impediments continue to constrain” the economy, and that to support stronger growth and job creation “policies should focus on implementing structural reforms to improve productivity and competitiveness and shore up the economy’s resilience to natural disasters”.

  • TRACKING TRENDS

    LatinNews 17 August 2017 Hits: 523

    COLOMBIA | Economic growth falls short of target. Colombia posted GDP growth of 1.3% in the second quarter of this year, the national statistics department (Dane) reported on 15 August. Dane director Mauricio Perfetti emphasised the successful performance of three sectors: agriculture (4.4%), finance and insurance (3.9%), and services (3%). However, other sectors struggled, with a 3.3% fall in activity in the manufacturing sector and a 6% fall in activity in the mining sector. While Colombia’s GDP grew at a slightly faster rate in the second quarter than in the first, the second quarter results bring the cumulative growth rate for the year to a modest 1.2%. This has led the likes of Bruce MacMaster, the president of the national association of businesses (Andi), to suggest that the economy will fail to meet the year-end GDP growth rate target of 2% set by the government. MacMaster argued that in order to achieve the government target domestic economic activity would have to increase by at least 2.8% in the next two quarters, which appears unlikely.

    BOLIVIA | Value of exports increase but volumes fall. On 15 August Bolivia’s foreign trade institute (IBCE), a local economic think-tank, published a report based on exports data collected by the national statistics institute (INE), which found that in the first half of the year the value of the country’s exports increased by 7% year-on-year to US$3.6bn despite a 13% fall in the volume of sales to foreign markets.

    Exports of minerals and fossil fuels, which made up 80% of Bolivia’s total exports in this period, were valued by INE at US$2.9bn, 14% higher than in the same period of 2016 but even these commodities saw a 12% decrease in volume of sales. Meanwhile export of goods described by IBCE as ‘non-traditional’, such as sugar, soybeans, and textiles, fared less well, bringing in just US$711m in total in the first half of the year, 14% less than in the first six months of 2016, on the back of a 23% fall in the volume of these exports – the third consecutive year that non-traditional export volumes have fallen in the January-July period.

  • TRACKING TRENDS

    LatinNews 05 September 2019 Hits: 3685

    CHILE | Fiscal stimulus package. On 26 August, Chile’s finance minister, Felipe Larraín, announced a fiscal stimulus package for the second half of 2019 and for 2020 totalling US$571m in a bid to try to stimulate domestic economic activity.

    The government has committed US$355m in additional government investment for this year and US$216m for 2020. The announcement comes at a time of global economic uncertainty (with Chile particularly affected by the ongoing trade war between the US and China) and low levels of GDP growth in Chile.

    Larraín stated that the “global economic situation has become much more complex…Chile is not immune from this…but we are well prepared”.

    Chile’s central bank (BCCh) figures show sluggish GDP growth for the second quarter of 2019: 1.9% year-on-year. During the same period of 2018, GDP growth was 5.3% year-on-year.

    This is the third fiscal stimulus package announced following those unveiled in June (which totalled over US$2.4bn). From the US$571m total, the ministries of housing and urban planning, public works, health, and agriculture will respectively receive US$218m, US$150m, US$26m, and US$63m, while regional governments will receive US$114m. Investment will be focused on infrastructure, housing, entrepreneurship and productivity, medical equipment, and irrigation.

    Larraín emphasised that the measures will not result in a budget deficit and take place within “the space that we have within the budget”. There has been a mixed response from economists. Sergio Godoy, chief economist at Tanner financial services, stated that the impact is likely to be limited, “due to the size of the measures being relatively small”. Alejandro Fernández, an economist at consulting firm Geminess SA, noted there is a need for a larger spending commitment in the 2020 budget, “even if it would imply deviating from the structural fiscal deficit goal”. Tomás Flores, an economist at think-tank Libertad y Desarrollo, noted the measure, in addition to an expected cut to the BCCh’s benchmark interest rate (confirmed on 3 September, when it was reduced from 2.5% to 2%), “will have a positive effect on GDP this year and the following year”.

  • TRACKING TRENDS

    Patrick de Courcy 16 November 2023 Hits: 1682

    BRAZIL | Tax reform bill returns to lower chamber. The senate approved a major government-backed tax reform bill (PEC 45/2019) on 8 November, which the lower chamber of congress had approved in July. Since the bill entails a constitutional amendment, it required two rounds of voting, and senators approved the bill by a vote count of 53-24 in both rounds.

    The bill will be reviewed again in the lower chamber because senators heavily edited the original legislation which had been approved by deputies. The long list of sectors that would be eligible for tax exemptions and reductions was updated, and senators added a provision to create another federal consumption tax known as the Imposto Seletivo (IS), unofficially known as the ‘sin tax’, which would be levied on transactions for unhealthy products, such as cigarettes, and for products associated with environmental harm, such as pesticides.

    According to local media reports, deputies might reject some of the senate’s changes but will aim to maintain the ‘spine’ of the bill – the main provisions aimed at merging several consumption taxes.

     

    BRAZIL | Slowdown in inflation in October. Monthly inflation stood at 0.24% in October, according to figures released by the national statistics institute (Ibge) on 10 November, marking a slight decrease from the 0.26% inflation registered in September.

    The accumulated inflation rate for the 12 months until October came to 4.82%. This figure is above the central bank’s 2023 annual inflation target range of 3.25% +/-1.5, but private sector analysts consulted by the bank released projections on 13 November which showed an annual inflation forecast of 4.59%.

    All but one of the nine categories of products and services measured by the Ibge showed a rise in prices this October. The categories which registered the highest inflation were household items (0.46%), clothing (0.45%), and transport (0.35%).

    The price increase in the transport category was mainly driven by air travel, which registered a notable inflation rate of 23.90%, up by 0.14 percentage points from September, the highest monthly increase of any product or service.

  • TRACKING TRENDS

    Abbi Dicker 28 March 2024 Hits: 2644

    ARGENTINA | Record beef exports. On 26 March, Argentina’s government reported record beef exports in February 2024, surpassing the previous month’s record. This, despite “a context marked by global economic uncertainty”, according to a government statement. 

    According to the statement, Argentina’s beef exports in February totalled 82,548 tonnes (t), up 25.68% on the same month in 2023, an amount that the government describes as “unprecedented” for the past 57 years. Meanwhile, beef exports for the first two months of 2023 totalled 160,000t, up 21.63% on the same period last year, which the government said signified “a trend of sustained growth in beef exports”.

    The surge in exports has been attributed to a change in export policy. On 1 January 2024, the new government led by President Javier Milei authorised the export of certain cuts of meat which had previously been banned by the previous government led by Alberto Fernández (2019-2023) as part of efforts to keep domestic prices down.

    The same government statement also showed that production of beef in the first two months of the year totalled around 504,000t, down 1.59% on the same period last year, while in February alone, production totalled 237,641t, down 0.61% on February 2023.

     

    BRAZIL | Interest rates lowered again. In its latest meeting running from 19-20 March, the monetary policy committee (Copom) of Brazil’s central bank (BCB) once again lowered the country’s benchmark interest rate (Selic), from 11.25% to 10.75%.

    This decision follows five consecutive Copom meetings since August 2023 each reducing the Selic by 50 basis points. Citing “heightened uncertainty and the need for more flexibility”, the latest meeting minutes indicated that the committee members agreed on a “reduction of the same magnitude in the next meeting”. However, if uncertainty remains high, “a slower pace of monetary easing may prove appropriate”, the minutes suggested.

     

    PARAGUAY | Central bank hails GDP growth. Paraguay’s economy expanded by 4.9% year-on-year in the fourth quarter of 2023, bringing the accumulated rate for the whole of 2023 to 4.7%, Paraguay’s central bank (BCP) reported on 26 March.

    The growth in the final quarter of 2023 follows 3.7% GDP growth in the third quarter, 5.6% in the second, and 4.8% in the first. As regards growth drivers in the fourth quarter of 2023, the BCP highlights services (up 5.2% year-on-year), manufacturing (+9.6%), livestock (+13.8%), and electricity generation (+8.3%). 

    However, construction and agriculture saw notable declines, of -8.5% and -5.8% respectively. As regards construction, the BCP cites slower pace of executing both private and public works, while in terms of agriculture, the bank notes lower levels of production of maize, wheat, and sunflowers in the fourth quarter of 2023. Nonetheless, over the whole of 2023, agriculture was up by 23.3%. The International Monetary Fund (IMF) is forecasting 3.8% GDP growth in Paraguay in 2024.

  • URUGUAY-ARGENTINA: Seeking papal inspiration for pulp mill dispute

    LatinNews 17 October 2013 Hits: 1635

    The event was replete with symbolism. Uruguay’s President José Mujica and Argentina’s President Cristina Fernández together launched a new high-speed catamaran dramatically cutting the journey time between Buenos Aires and Montevideo. Christened Francisco, in the Pope’s honour, and with Fernández as godmother, the catamaran’s launch was designed to demonstrate that Uruguay and Argentina are closer than ever. If the physical distance between the two countries appears to have been reduced, however, the diplomatic distance is increasing. Once again, the Uruguayan pulp mill in Fray Bentos is poisoning relations; how much it is poisoning the shared river is the big question and one which might end up being taken up by the International Court of Justice at The Hague – again.

    The LNG-propelled ferry launched by Presidents Mujica and Fernández on 30 September will cut the length of the voyage between Buenos Aires and Montevideo by a third; it will now take just two hours to get between the two capitals in comparison with other ferries used by the binational maritime company Buquebus.

    Naming the ship Francisco was intended to bestow a papal blessing on ties and it prompted Sergio Urribarri, the provincial governor of Entre Ríos, the province located directly opposite the pulp mill on the banks of the River Uruguay, to suggest that the Pope would be well placed to mediate between the two countries. The Vatican declined the poisoned chalice.

    It is not as if the Finnish owners of the pulp mill, UPM (formerly Botnia), made a request last week to the Uruguayan government to approve an increase in production at the mill from 1m tonnes to 1.2m tonnes. Uruguay raised the issue at the administrative committee of the Uruguay River (Caru) back in March 2012. The Argentine foreign minister, Héctor Timerman, claimed that Argentina requested additional technical information, but had only received answers to 11 of its 21 questions and, as such, had not responded to the request. The Uruguayans accuse Argentina of choosing to ignore the request.

    Unable to reach an agreement with Argentina, Mujica was left in an invidious position: grant unilateral approval to UPM and risk upsetting Argentina; or reject the request to increase production and upset UPM while risking looking politically weak at home.

    Timerman ratcheted up the pressure on Uruguay by threatening to return to The Hague if Mujica opted to make a unilateral decision on the matter, adamant that the ICJ ruling in 2010 was based on “an annual limit of 1m tonnes” and that anything else was a game changer which invalidated this ruling.

    In the end Mujica did his best to find a balance. On 2 October he granted approval to UPM to increase production – but only by 100,000 tonnes per year (half its request) and only on condition that it implement new environmental safeguards in order to minimise the impact of the increase in production. These include a cooling tower to ensure the temperature of wastewaters entering the river is below 30 degrees, and a reduction of the phosphorus content of the effluents. “The small ditches on my farm generate more phosphorus than the UPM plant,” Mujica quipped while speaking during a private event at the Instituto del Niño y el Adolescente del Uruguay (INAU).

    Timerman was singularly unimpressed. He swiftly responded that Argentina was left with no alternative but to return to The Hague unless Uruguay reversed its unilateral decision. Answer came there none as Mujica instructed his government to preserve a dignified ‘silence’ to avoid stirring up more tension. Mujica’s implication that it would not be possible to have a rational discussion with Argentina so close to legislative elections (on 27 October), which are crucial for the political future of Kirchnerismo, was testily dismissed by Urribarri as “offensive and unacceptable”. Urribarri has not received the public support of other governors, and a motion in the senate from the Kirchnerista Pedro Gustavino (representing Entre Ríos) rejecting Uruguay’s decision got nowhere.

    Timerman’s announcement on 9 October that Argentina would wait “a couple of days” before returning to The Hague prompted Mujica to assert that “Only God gives ultimatums”.

    Timerman maintained that a report from Argentine scientists on a binational scientific committee had shown that the temperature of the effluents from the pulp mill was higher than permitted, and noted the presence of carbolic acid, phosphorous, chromium, nickel and the pesticide endosulfan. He claimed that Uruguay had “violated the mechanism of information and consultation agreed between both our countries on eight occasions”.

    Intriguingly, the Uruguayan scientists on the team, who were not shown the Argentine report, reached rather different conclusions. Uruguay’s national daily El País revealed that they had reported that none of the 26 water samples taken between June 2011 and July 2013 in areas close to the plant had a higher concentration of effluents than permitted; that the level of phosphorous was well below the maximum authorised; and that no endosulfan had been detected.

    The Uruguayan scientists also found that the level of pollution was significantly higher in 25 samples taken in the mouth of the river Gualeguaychú, an Argentine tributary of the River Uruguay by the eponymous town opposite Fray Bentos, over the same period. Mujica said that people needed to be informed better, pointing out that Timerman had neglected to mention that the levels of endosulfan were 10 times higher by the mouth of the river Gualeguaychú.

    Uruguayan opposition reacts

    By and large Mujica has tried to avoid being drawn on the dispute, saying he would wait until after his Argentine counterpart Cristina Fernández convalesces from surgery to remove a blood clot on her brain, and the Argentine elections are over.

    There has been no such reticence on the part of the Uruguayan opposition. The presidential pre-candidate for the opposition Partido Nacional (Blancos), Jorge Larrañaga, accused Timerman of “barefaced lies” and Argentina of violating Uruguay’s “national sovereignty” and “right to development”.

    Former president Julio María Sanguinetti (1985-1990, 1995-2000), of the Partido Colorado, accused the Mujica administration of being too passive with Argentina (an habitual complaint) in the face of “gross distortion of the facts”. He actually complained that the government had seen fit to condition the increase in production by UPM on improved environmental safeguards, arguing that this merely confirmed Argentina in its suspicions that “we are doing now what we should have done before”. He said that “the alleged political affinity” between Mujica and Kirchnerismo had not helped at all

    *The national congress of (Uruguay’s 19 departmental) intendants unanimously voted to support the Mujica administration’s decision. “I think our big brothers (in Argentina and Brazil) instead of throwing us a buoyancy aid to save us are chucking us an anchor,” the intendant of Soriano, Guillermo Besozzi, complained.

    • Protests

    On 6 October some 1,000 residents of Gualeguaychú tried to march to Uruguay to protest against the Mujica administration’s decision but they were blocked from crossing the San Martín international bridge which links Argentina to the Uruguayan town of Fray Bentos.

    • Mercosur

    Sergio Urribarri, the governor of the Argentine province of Entre Ríos in which Gualeguaychú is located, accused Mujica of causing the Southern Common Market (Mercosur) to fail. This must have touched a raw nerve in Uruguay where the opposition has been agitating for the Mujica administration to take a much tougher line over Argentine trade protectionism which contravenes a core principle of the customs union - the free movement of goods. The real failing of Mercosur, which the renewed diplomatic tension between Argentina and Uruguay once again highlights, is its institutional weakness; 22 years after its formation Mercosur lacks a working supranational dispute resolution body capable of resolving differences between founding members.

  • NICARAGUA: More controversy over ‘Gran Canal’

    LatinNews 19 May 2016 Hits: 1291

    This month the governmental committee for Nicaragua’s US$50bn ‘Gran Canal’ project and the nine communities which make up the indigenous Gobierno Territorial Rama y Kriol (GTR-K) in the South Atlantic Autonomous Region (Raas) signed a deal to lease an extensive portion of land in the region through which the ‘Gran Canal’ would pass. GTR-K members have since come out against the agreement, claiming it was in breach of decision-making protocol. These doubts over the validity of the local consultation process on the project which is to link the country’s Caribbean and Pacific coasts – for which the Frente Sandinista de Liberación Nacional (FSLN) government led by President Daniel Ortega is pushing – follow other recent protests against it.

    According to FSLN-aligned media el19digital, the agreement was signed on 3 May after two and a half years’ worth of consultations with the communities and gives China’s Hong Kong Nicaragua Canal Development Company (HKND) – which was awarded the build-operate contract in June 2013- permission to use the land in an area of 263km2. El19digital notes that the Rama-Kriol territory spans an area of 406,849.3 hectares (ha) of land, plus 22 cays and 441,308 (ha) of maritime area while the nine communities involved are: Sumu Kaat; Tiktik Kaanu; Rama Cay; Wiring Cay; Monkey Point; Bang kukuk; Corn River; Indian River; and Graytown.

    El19digital cited GTR-K president, Héctor Thomas Macrae, as saying that he signed the agreement in the belief that the Canal “will contribute to the good life of the communities, generating well-being, safeguarding the culture and respecting ancestral traditions”. Meanwhile Telémaco Talavera, the ‘Gran Canal’ committee spokesperson, assured that the culture of indigenous peoples, national laws, international treaties and the United Nations Declaration on Indigenous Peoples would be respected.

    Since the announcement of the agreement, however, a group of Rama-Kriol community leaders have come out against it. On 7 May, local investigative media El Confidencial cited Rupert Allen Claire Duncan, Monkey Point leader and a GTR-K member, as saying that not all community leaders saw the contents of the document. He said that of the 18 delegates on the GTR-K directorate, only 11 had signed the deal – a breach of protocol as any decision taken must have the backing of all communities. On 3 May, national daily La Prensa cited Claire as saying that a document had been “signed two weeks ago in which we said that we would not sign anything as long as there was no legal advice and that a prior, free and informed consultation had not taken place so we do not recognise this signature nor this consent”. Becky McCray, coordinator for GTR-K community justice, also told La Prensa that the central government “has divided [the indigenous communities] so they can advance their project, because consent on the part of the communities does not exist”.

    More protests

    Also indicative of continued opposition to the ‘Gran Canal’ project, on 22 April hundreds of campesinos travelled from Managua and elsewhere to Nueva Guinea municipality in the Raas, to protest against it. Organised by a local civil-society group, Consejo Nacional en Defensa de Nuestra Tierra, Lago y Soberanía (Consejo Nacional), this was the fourth national demonstration against the project – part of more than 60 demonstrations of its kind that have been held throughout the country.

    On 18 April, the directorate of the 92-member national assembly rejected an appeal against its week-earlier decision to reject a citizens’ initiative to repeal the June 2013 law (840) granting HKND Group the 50-year build-operate concession. Presented by the Consejo Nacional on 7 April, the citizen’s initiative was backed by 28,600 signatures, well over the requisite 6,000 to submit a citizens’ bill. However, this was rejected by the legislature’s directorate on the grounds that it lacked jurisdiction.

    • Foreign cooperation

    On 15 April, Nicaragua’s central bank (BCN) released its latest report on official foreign cooperation to Nicaragua which reached US$1.1bn in 2015, down 3.7% on 2014. As a percentage of GDP, foreign cooperation was the third largest source of external funding to Nicaragua after exports of goods and services and family remittances. Of the total US$1.1bn, 54.7% was from multilateral sources and the rest from bilateral funds. The biggest lenders for both private and public sector cooperation in 2015 were Venezuela (US$309.4m) – although this was down from US$619.m in 2014; the Inter-American Development Bank (US$208.3m); the Central American Bank for Economic Integration (US$198.2m); the World Bank (US$58.6m); the Netherlands (US$51.6m); the Inter-American Investment Corporation (US$46.6m); the European Union (US$42.7m); and Germany (US$34.1m).

  • TRACKING TRENDS

    Anna Grace 16 February 2023 Hits: 4327

    BRAZIL | Campos Neto sounds conciliatory note. Brazil’s central bank president Roberto Campos Neto sought to downplay differences with the government led by President Luiz Inácio Lula da Silva in a long interview with the ‘Roda Viva’ programme of TV Cultura on 13 February. “The central bank needs to work together with government, and I will do everything in my power to bring the central bank closer to government,” he said in response to a question related to criticism levelled at the bank by Lula days earlier that “there is no reason for the interest rate to be at 13.75%” to contain inflation, which is currently running at 5.77%.

    Campos Neto also suggested that fiscal measures proposed by the finance minister, Fernando Haddad, could ease the need for tight monetary policy and bring forward the point at which the central bank will be able to cut the benchmark Selic interest rate. He acknowledged the case for coordinating fiscal and monetary approaches saying “without harmony, on the one hand you are stimulating the economy and on the other you’re slamming on the brakes, and that causes inefficiencies”.

    Campos Neto also responded to a question about his political affinity to former right wing president Jair Bolsonaro (2019-2023), who appointed him in 2019. On election day last year, he wore the yellow and green national football team shirt favoured by Bolsonaro supporters. But Campos Neto dismissed the question, saying that the central bank had raised the Selic during the election campaign, which he said showed its political independence from the Bolsonaro government.

    The political dimension of the interest rate debate remains important. Members of Lula’s left-wing Partido dos Trabalhadores (PT) have called on Campos Neto to resign, and some favour congressional action to remove him - unlikely to prosper because of the conservative majority in both chambers. But attacking the central bank could allow the government to shift blame on to it for the flat performance of the economy.

  • ECONOMIC HIGHLIGHTS

    Patrick de Courcy 08 December 2023 Hits: 655

    REGION | New BCIE president. On 17 November, the Central American development bank (BCIE)’s board of governments elected Costa Rica’s Ana Guissella Sánchez Maroto as the new BCIE executive president for the next five years, the first woman to hold the post. According to a BCIE press release, Sánchez, who was chosen from a final shortlist of six candidates, has over 20 years professional experience. The statement notes that she has held posts such as regional director of strategy for regional banking group BAC Credomatic, and regional director of corporate relations of Costa Rican food and beverage company, Florida Ice & Farm Company, among other roles, and has “extensive experience in executive and management positions in economic, financial, banking, and development policy matters”. The appointment drew particular scrutiny as her predecessor, Honduras’s Dante Mossi, had come under mounting international pressure to halt funding to Nicaragua’s government led by President Daniel Ortega amid democracy and human rights concerns. The bank has approved nearly US$3.5bn in funding for initiatives in Nicaragua in recent years.

    HONDURAS | National emergency over rains. On 3 November, Honduras’s President Xiomara Castro announced a national emergency in all 18 departments due to rains caused by Tropical Storm Pilar which reached the Central American coast at the end of October, affecting areas along the Pacific coast of El Salvador (which declared a national emergency the previous week), Honduras, and Nicaragua. Castro’s announcement instructed the country’s permanent contingency commission (Copeco), a government entity created to coordinate public and private disaster relief efforts, to maintain the national risk management system active in order that institutions responsible for construction, reparation, and maintenance of infrastructure works can assign necessary contracts for works, goods, and services to address the impact of the emergency.

    Central America & Caribbean: inflation rate
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  • Brazil expects growing ESG funding market

    Patrick de Courcy 05 June 2024 Hits: 1191

    All publicly listed companies operating in Brazil will be required to publish annual sustainability and climate related disclosures, starting in 2026, according to proposals made by the ministry of finance and the country’s Securities and Exchange Commission (Comissão de Valores Mobiliários- CVM). The reporting format is expected to be based on the International Financial Reporting Standards Foundation (IFRSF) and on recommendations from a linked body, the International Sustainability Standards Board (ISSB). Finance Minister Fernando Haddad said he hopes reporting “will generate a virtuous cycle of greater transparency and commitment, allowing the possibility of measuring the issue, so there needs to be a global institutional metric”.  

    Brazil is one of a handful of Latin American countries that are developing an ESG-linked financing market. Some of the financial products under development are ‘green’ and ‘blue’ bonds. Green bonds are designed to fund projects that aim to achieve climate-related or environmental goals, while Blue bonds fund projects linked to maritime preservation and clean water. As this is an emerging market, with a range of different bond types (not only green and blue, but also various types of sustainability linked debt), efforts are being made to build an agreed classification system known as a taxonomy.

    Brazil does not yet have an agreed taxonomy for ESG financing but in the meantime is using international standards such as those set by the International Capital Market Association (ICMA) and the Climate Bonds Initiative (CBI). Verification by a second party opinion is required for a financial instrument to be certified as green, social, or sustainable. According to the CBI, by the end of 2022, Brazil was the third largest sustainable debt market in Latin America; during the year US$7.2bn worth of sustainable debt transactions were reported, taking the total outstanding to US$31.9bn.

    The CBI broke the totals down into five categories: green bonds, social, sustainable, sustainable-linked, and transitional instruments. Green bonds were the largest, with a cumulative total debt of US$15.2bn at the end of 2022, making Brazil the largest issuer in Latin America in that category. Over half (52%) of Brazilian green bonds were used to fund renewable energy, while the rest of the money was flowing mainly to land use projects (20%) and transport (10%). Other smaller recipients of green funding were water supply, sustainable forestry, and biodiversity management.

    In general, a distinction is made between ‘use-of-proceeds’ bonds, where the money raised goes to specific projects, and sustainability-linked bonds, used for general budget purposes but with a yield linked to the country’s performance in key green metrics. The ICMA recommends that sustainability-linked-bonds should use key performance indicators (KPIs) that are “measurable and verifiable by external review”, calibrated, and with variable interest rates.

    In early 2023 it had been reported that Brazilian officials were holding talks with colleagues from Mexico, Germany, Colombia, and Chile to discuss a shared framework for ESG bonds. At the time the Brazilian finance ministry issued a statement saying the aim of the talks was to “build a robust framework that will serve as a reference for an active and constant presence” in markets focused on themes like climate change.

    There is considerable scope for innovation in Brazil’s ESG funding sector. In 2023 Companhia Energética de Minas Gerais (Cemig – a state-owned power company) issued a BRL2bn (US$385m) sustainability-linked debenture, the largest of its type to date. What are called ‘incentivised debentures’ are a strong growth area in Brazil because under Law 12,431 their interest payments and capital gains are tax-free These tax breaks are granted when the debentures are used to fund infrastructure projects, agribusiness letters of credit, and other nominated financial assets. Last year incentivised debentures were issued in a wide range of ESG-related sectors including health, education, public safety, the prison system, urban parks, sports facilities, housing, and urban development.

    The country is developing ESG funding regulations. Rule 160 issued by the Brazilian Securities Commission (CVM) requires that ESG related offerings should provide detailed and externally verified information on the claimed sustainability-linked element. Given the danger of ‘greenwashing’ the CVM also requires stricter transparency and accountability. ESG issuers must explain their objectives and investment strategies, specify metrics and parameters for information disclosure, and specify an independent third party to confirm performance. 

    In September 2023 the Brazilian government launched a Sovereign Sustainable Bond framework, assisted by the InterAmerican Development Bank (IDB) and the World Bank. The framework contains guidelines for ESG-related debt issuance and is expected to lead to increased interest in this type of financing. The finance ministry also said that it was working on a taxonomy, likely to be published this year (2024) and to come into effect in 2026. The ministry is also working on a regulatory framework for trading in carbon credits.

  • TRACKING TRENDS

    Abbi Dicker 09 April 2026 Hits: 722

    BRAZIL | Industrial production posts slower growth. The national statistics institute (Ibge) released new figures on 2 April showing that the country’s industrial production in February increased by 0.9% compared with January but decreased by 0.7% compared with February 2025. The accumulated annual production for the 12 months through February 2026 was up 0.3% on the preceding 12-month period. The monthly result for February marks a deceleration compared with a 1.8% monthly increase in production from December to January. The annual figure for February also represents a slowdown compared with the annual increase of 0.5% registered for the 12 months ending January 2026.

    Of the 25 product categories measured by the Ibge, 16 posted a monthly rise in production in February 2026. The greatest monthly increases were registered in furniture (+7.2%), machinery and equipment (+6.8%), and vehicles, trailers, and car bodies (+6.6%). The greatest decreases were registered in tobacco products (-7.2%), pharmaceutical products (-5.5%), and other transport equipment (-3.2%).

    BRAZIL | Embraer posts year-on-year rise in deliveries. Aircraft manufacturer Embraer announced on 2 April that it completed 44 deliveries in the first quarter of 2026. This is lower than the 91 units delivered in the final quarter of 2025 but up from 30 deliveries in the first quarter of 2025. Most of the aircraft delivered in the first quarter this year were executive jets, with 29 deliveries. This is down from 53 executive aircraft delivered in Q4 but up from 23 delivered in Q1 last year.

    Meanwhile, Embraer delivered 10 commercial aircraft in Q1 2026, down from 32 units the previous quarter but up from seven units delivered in the same quarter last year. Regarding military aircraft, the Brazilian manufacturer delivered five fighter jets and transport aircraft. This is down from six units of military aircraft in Q4 2025, but up from no units delivered in Q1 2025.   

    According to a company press release, Embraer estimates that it will deliver a total of 80-85 units of commercial aircraft in 2026 and between 160-170 units of executive jets this year.