By Otto Rock
This piece was part of IKN484, out last weekend.
How LatAm and Carib economies are doing compared to expectations
Generally recognized as the best regional macro-economic study group, CEPAL held its mid-year update in Mexico last weekend and during the week I had chance to catch up on its mid-term report on Latin America and the Caribbean. As usual there’s a lot of information, both on the overview and granular ends, as you’d expect from a 242 page document (get yours on this link here (4) if economics in Spanish language is your thing too…yummy), but after perusing through I think this chart (with personal notes added) is a useful guide to the region and its economies, worth a segment on the Weekly.
What we see is the GDP performance in 2018 of the regional countries, done in order of GDP growth (e.g. Dominican Republic is doing best at +5.4% growth this year, Venezuela worst at -12%). Expectations for growth weren’t on the spectacular end of the spectrum at this point in the cycle, so numbers like +4% or +5% may be good and solid but they’re not going to make world headlines against the +7% of China or +8% of India. Which brings me to the reason I chose this particular graphic, as it charts the current estimates for 2018 compared to CEPAL’s own forecast made for 2018 at the end of last year.
In essence, we get a “How are we doing?” table that allows us to gauge relative performance. Notes below.
- Dom Rep tops the table, but as we note further down in today’s Regional Politics section it’s no thanks to any new mining projects coming through (or its inept Ministry of Energy and Mining, which is in the process of sweeping its failures under the carpet).
- From here I’ve picked out worthy data points in countries that interest us, both size-wise and in their mining sectors. In the top half of the list, Chile, Peru and Colombia are all out-performing their expectations (with Chile particularly strong, Piñera in full honeymoon mode).
- The LatAm average (which excludes Venezuela) was set at +1.3% and is now re-set at +1.5%, so that’s good. It’s been boosted by the less-worse performance of the region’s biggest economy by far, Brazil (+1.6%) (For context, the gross GDP league table for LatAm is 1) Brazil 2) Mexico 3) Argentina. And just the Sao Paulo region of Brazil has a bigger GDP than Argentina).
- Ecuador is under-performing and in fact, just this week has gone to the IMF for a mini-bailout.
- Nicaragua was forecast to be a high-performing country this year, but its economic woes brought on by the anti-government protests have scuppered that.
- Argentina is the poster child of how the Industrialized Nation countries will talk up the return of neoliberal policies and insist that things are better than they are. More on that below.
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