South America (Latam), Real GDP YOY%
2015201620172019E2020E2021E
South America (Latam), Real GDP YOY%2.62.32.8333.1
Argentina2.8-3.13.8333.2
Bolivia63.24.343.73.7
Brazil-5.8-2.71.42.72.72.2
Chile2.31.21.63.33.53.1
Colombia3.41.533.13.33.7
Costa Rica3.93.52.73.53.1
Ecuador-2-1.53.31.61.91.8
El Salvador2.42.42.32.22.2
Guatemala42.62.73.53.5
Honduras3.63.64.83.93.8
Jamaica0.82.112.22.4
Mexico2.52.11.62.42.22.9
Panama5.34.54.95.65.5
Paraguay0.75.34.7443.9
Peru4.74.42.93.743.9
Uruguay-1.31.11.93.132.9
[Positive] Teg: Mexico

In spite of Mexico-US tensions, I expect further growth of the country's economy, which will be provided by increasing industrial production. The Mexican peso's depreciation will push the external demand for Mexican products, which in turn will make a positive impact on local manufacturing production and exports. Also mining production will continue to support total industrial production growth, as well as construction activity will continue to expand. In sum, my positive outlook on Mexico's economy reflects sustainable growth in the mid-term.

[Negative] Teg: Mexico

Relations with the US, Mexico's dominant trade and investment partner, will continue to be foreign-policy priority for the country. I think that tension will persist, due to Donald Trump's determination to build a border wall and tighten restrictions on immigration, as well as his rigid position on trade. In addition, I see continuous risk in NAFTA negotiations, which are accompanied by disagreements. In my view uncertainty over NAFTA and Mexico's presidential elections will weaken business and consumer confidence in short-term, resulting in slowdown of capital inflows. Also I don't expect that education and other reforms implemented over the last years will reach their potential, due to weakness of government institutions. Weak public investment, significant dependence on import and high level of poverty (almost 50% of the population) will also impede economic growth. Therefore I have negative outlook for the economic development of Mexico.

[Positive] Teg: Brazil

I expect that Brazil's economy will continue to recover from downfall in 2015-2016, as well as weak growth in 2017, and will show annual average real GDP growth at 2.6% in 2018-2022. Lower inflation and interest rates are supporting the growth of private consumption, given by stimulating retail sales and improving household and company balance sheets. However, the credit growth is weak, due to the banks haven't adapted to the sharp decline in the policy rate. In my view, by implementing fiscal reforms and pursuing a sensible policy, the next government could increase the investment, after falling by 25% in 2015-2016, and provide stable economic growth in 2018-2022. Therefore I have positive outlook for Brazil's economy.

[Negative] Teg: Brazil

Despite recent stabilization in Brazilian economy after recession in 2015-2016, I assume that this recovery will be short-lived. The thing is, budget deficit remains high and its reduction might lead to both growth lowering (due to reduction of government spending) and social instability (due to unpopular measures such as raise the retirement age). As a result, political crisis is quite possible and, if so, that will lead to second wave of recession

[Positive] Teg: Brazil

After recession in 2015-2016 Brazil shows strong signs of recovery. The major problem of Brazil economy was high inflation that led to (1) decreased real consumption (coupled with high unemployment rate), (2) higher interest rate (for both households and government). Banco Central do Brazil was able to take prices under control and, thus, ensuring a healthy mix of falling inflation and lower interest rates. The result is economy growth due to (1) private consumption increasing, (2) unemployment decreasing, (3) export increasing. Nevertheless, budget deficit remains high and that creates risks. That is why I assume that next steps might be (1) limitation of government expenses, (2) privatization, (3) pension reform (particularly, unpopular measures such as raise the retirement age).

[Positive] Teg: Mexico

In 2017 foreign investments in Mexico fell due to uncertainty relating to USA commitments to NAFTA. This will result in poor growth of GDP for 2018. This goes together with domestic policy uncertainty remains until presidential election on 1st July 2018. After, I would suggest that we may expect pro-American president thus we may expect positive shifts in policy (mainly renegotiation of NAFTA with the USA). Growth in Mexico seems to be moderately higher in 2019 and 2020, at 2.5-2.7 percent per annum but this year 2018 - poor 1.0% - 1.9%

[Negative] Teg: Brazil

The Brazilian government one month ago announced that GDP this year (2018 will grow faster and they wait recovery from the recession for the past 10 years. This is for optimists. I do not see real activity (as you know some big steps) to resolve structural problems in economy. Look, all they wants to do is to narrow a budget deficit by curtailing the social security system. This will not help. Obviously imho.

[Negative] Teg: Argentina

Some businesses would be upset if they (as it was announced by the Government) cut economic subsidies mainly for energy and transport. I do not think that for these funds they (the government) may find more efficient application in others sectors if the money really be transferred to any of demanding sectors at all. I bet that the funds will go to government itself (for their internal needs) as it was in Argentina history from time to time.

[Neutral] Teg: Brazil

Brazil is going through real serious budget problems: aging of population with the trimming of social security spending. This is the main drawback for growth potentials of the country . Most people thinks the future election may help. I am skeptical to this. I would suggest to increase pension age and to invest heavily on to the sectors to replace imports.

[Negative] Teg: Venezuela

One hope that current oil price increase would somehow give some strength to Venezuela economy. It has great oil reserves but how it is now the poorest country. They need very strong government to take the control over all sectors, including mass media and to restrain all of it , I mean any public violent demonstration. But before doing so, for the health of all officials of Venezuela it is worth to solicit support from Russia and China (within BRICs). This only may help. Well, just economic reforms will not help at all. Please, not be naive. Only strong, military government may help, may change the situation for the better

[Positive] Teg: Venezuela

Frankly speaking if I were the president of Venezuela - Mr. Maduro - I think that the only right step to do in order to take control over the long run recession is to restrain all so-called democracy to take the control over everything with a help of police and military. Then, to ask, to plead Mr. Putin to establish military facility here in Venezuela in order to protect physically itself from US wrath. And ultimately to write off all its debt... This will, clearly, help with oil prices and will limit US influence over Venezuela's power of democracy. The only one favorable exit (from recession and crisis) is to use BRICs conjointly with Russia and China (at least with Russia). Just rhetorical question: why Anglo-Saxon countries are in relative prosperous position? the answer is that they always act jointly (via NATO for example). NATO has come to Russian boundaries right at hand. Thus, Venezuela should persuade Mr. Putin to come closer to US boundaries. You will say this is like a cold war.. Of course, cold war has never been stopped. Venezuela is the country that must to be prosperous but to do so we need to act jointly, otherwise we all lose one-by-one.

[Positive] Teg: Argentina

Most sources say that the economy of Argentine is expected to accelerate in 2018 and 2019 on the grounds of the increase of consumption and investments in fixed assets. I remember that they want to raise infrastructure's investments by 20% this year. It is very nice and promising for businesses which engaged in mineral resource extraction, agricultural and chemical sector, well would be done and for the others in total. In such scenario GDP would expand minimum by 3% this year and by 4% in 2019. It is also worth to note (on my opinion this is important) that the government announce to cut the spending's on state apparatus. Nonetheless, this in total is ideal picture. To be skeptical for GDP, I guess adequate rates for 2018 and 2019 are 2% and 2.5%