Inevitably, perhaps, private-sector economists have lowered their economic growth forecasts for Mexico this year. In a report published on Thursday by the country’s central bank, the monthly poll of leading economists showed that the consensus for 2011 growth dropped to 3.81 per cent from 4.24 per cent just last month.
The fall in expectations is a clear reaction to the stream of disappointing economic data that has come out of the US recently. But it’s not all bad news for Mexico. Read more
The Argentine central bank’s sales of foreign currency reserves have reached a two-year high. But there’s nothing to worry about says Mercedes Marcó del Pont, governor of Argentina’s central bank.
She says the peso is competitive, there’s no risk of a sudden devaluation, accelerating capital flight is just a pre-electoral thing, and even if reserves slip below $50bn, there’s nothing to be concerned about because Argentina is using those reserves to pay off debt, and that is “virtuous”. Read more
The risk of further decline in Europe and the US is growing while Asia is growing and attracting investment. Robert Subbaraman, Nomura’s chief economist for Asia ex-Japan, tells the FT’s Robert Cookson what he thinks would happen if the worst case scenario comes to pass.
Striking workers at Shougang’s iron ore mine on Peru’s south coast have put the spotlight on Chinese investment.
Chinese companies are expected to invest some $10bn in the Andean nation in the next five years, about a fifth of the anticipated foreign investment. So questions of how Chinese operations are managed – and for whose benefit – are critically important, particularly with new president Ollanta Humala pledging simultaneously to safeguard investors’ interests and spread the fruits of economic growth more equally. Read more
The first photos of the new Volkswagen model Up! were released only a few days ago. The associated press release talked about a car that’s small, but full of potential. Just like the country where it’s to be assembled.
The decision to make Up! in Slovakia underlines the importance of the kind of foreign investment that often goes unnoticed – the expansion of factories where ribbons were cut years ago. Volkswagen arrived in Slovakia in the early 90s and opened a factory in Martin 11 years ago: so it already part of the landscape. But with eurozone growth slowing and domestic demand weak, the new model can bring Slovakia a much-needed boost. Read more
Serbia’s swift conclusion of a €1bn precautionary agreement with the International Monetary Fund this week has boosted confidence in the Balkan state despite the general economic gloom.
Belgrade says it’s only a just-in-case arrangement which it has no intention of using unless unforeseen shocks strike. But it’s a wise move – Serbia needed IMF support after 2008 and may need it again if the international enviroment gets any worse. Read more
“Give me a one-handed economist!” President Truman used to ask. But look around the world at the moment, and it is divided between economists offering the kind of “on the one hand, on the other hand” advice that so exasperated Truman.
Brazil’s central bank clearly did not feel sitting on the fence was an option. It has just delivered a surprise 50 basis point cut. Financial markets’ parsing of this unexpected move is that Brazil believes growth rather than inflation is its biggest concern. This has prompted economists at HSBC to wonder who might be next. “Will everyone now go Brazilian?” it asks. Read more
A dark skin complexion remains one of Indian society’s most visible taboos.
Indians are becoming more western in their consumer habits, buying anything from jeans to mobile phones, but on one point they remain resolutely traditional – the preference for fair over dark skin. Read more
Sino-Forest, the Chinese forestry company fighting allegations of fraud, is heading for a calamitous default on its $1.8bn of international bonds.
That, at least, is the verdict of the bond market. Read more
Work is humming on Warsaw’s Zlota 44 tower, an iconic building being put up by Orco Property, but the signs of activity do not mean that one of the largest developers in central Europe is out of trouble.
As results for the first half of the year released late on Thursday show, the company is surviving but the burden of the debts it acquired in its rapid pre-2008 expansion still weigh heavily on the balance sheet. Any down turn in global financial conditions will be bad news as Orco struggles to refinance parts of its €1.16bn net debt. Read more
Three lots of economic data – and a surprise interest rate cut in Brazil – highlight the contradictory pressures on India’s central bank as it considers whether to raise rates again, perhaps as soon as this month.
Food prices rose 10.05 per cent year-on-year in the week to August 20; exports soared 82 per cent in July; and Maruti Suzuki, India’s biggest carmaker, saw a 12.7 per cent plunge in sales last month. Meanwhile, in Brazil, the central bank cut rates by 50 basis points in response to mounting concerns about the global economy. Read more
Thursday’s top picks from the beyondbrics team: why a rate cut may be wrong medicine for South Africa, what Russia needs to change to achieve a credit upgrade and BP’s Russian roulette experience. Read more