LatAm economy

An IMF research paper shows how rare Latin American financial crises have been since 1998, when the world was rocked by EM currency crises. We’ve graphed the findings below.

Carlos Vegh and Guillermo Vuletin, the authors, think the continent has learnt from 1998. Successful countries like Brazil, Peru and Chile have stimulated their economies when GDP dipped; before 1998, they were less keen to do so. 

Here is a reminder, if any were needed, of how economists and investors have turned sour on Latin America during the course of this year.

 

Beyondbrics’ very own Jonathan Wheatley will be chairing a forum on Latin America and the new global economy. And you can watch it live from 4pm EST, or 9pm GMT, using the details below.

See below the break for the link to register, panelist details and more. 

Investors have got used to the idea that Brazil’s economy is not delivering on its post-crisis promise and that Chile, Peru, Colombia and Mexico are where future growth lies.

But how upbeat are consumers in those countries? A survey commissioned by LatAm Confidential, a new service from the Financial Times launched this week, throws up some surprising results. 

By Fernando Losada of AllianceBernstein

Since May, over a quarter of the past five months’ foreign portfolio investment into emerging markets has been withdrawn, according to the latest available data from EPFR. For the Latin American economies, this is likely to result in slower growth, but the impact may be milder this time around. 

By John Paul Rathbone and Keith Fray

Why did Hugo Chávez win last October’s presidential election so resoundingly? One simple answer is that he spent his way to re-election. In the run-up to the vote, government spending increased by a whopping 25 per cent, and that’s in real terms. No wonder Venezuela is now suffering from a yawning fiscal deficit and has just devalued.

But what about the rest of the region? After so many decades of populist-fuelled booms and busts, has it finally brought the political-cycle to heel? Beyondbrics wrapped a cold towel around its head and examined the statistics. Not every country passed. 

The future looks bright for the Corporación Andina de Fomento (CAF), the Latin American development bank.

Not only have the CAF’s lending operations almost doubled in the last five years to over $15bn, but the bank’s president, Enrique García, expects them to double again over the next five years. 

India is hoping to reach $50bn in trade with Latin America by 2014, according to a recent interview with Rengaraj Viswanathan, Indian ambassador to Argentina, Uruguay and Paraguay.

The move would more than double current trade between the markets, which totaled a little more than $24bn in 2010, with India exporting $10.7bn and importing $14bn with LatAm.