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Latin America at a glance: August 2017

In this section we provide you a wide overview of Latin American Economy, Politics and Business Opportunities in 2 minutes.

About Economics

The FocusEconomics Analyst Forecast Awards recognize the top economic forecasters for 80+ countries worldwide for the main macroeconomic indicators. Interested about other regions? Take a look at FOCUSECONOMICS

Argentina

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In June, industrial production increased 6.6% vs. PY and according to the latest data released by the National Statistical Institute (INDEC). The significant 2.7% growth observed in the previous month—which put an end to fifteen consecutive monthly declines in industrial production —and marked the highest reading in almost six years. According to INDEC, June’s strong growth mainly came on the back of expansions in the food, automobile, chemical, metallurgic, oil, paper and basic metals industries and higher production of non-metallic minerals and rubber and plastic. Source: FOCUSECONOMICS

Brazil

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  • August 5, 2017; Sao Paulo. On August 2nd lawmakers in the lower house voted not to refer the case against Michel Temer to the supreme court and their scandal-plagued president. A vote the other way would probably have led to Mr Temer’s suspension from office. After an uproarious debate, to which anti-Temer deputies brought suitcases stuffed with fake cash, the president won a comfortable victory: 263 deputies voted against referring the case to the supreme court while 227 voted in favour. Mr Temer needed just 172 votes to block the motion. Source: The Economist.
  • 03 Aug 2017; S.Paulo. Finance Minister Henrique Meirelles downplayed the 227 favorable votes to the complaint against President Michel Temer at the session of the Chamber of Deputies and said that the government’s expectation is to approve until October the pension reform and until at most November The tax reform. “The tax will depend on it being presented, but clearly it is expected to be this year … The Social Security in October and the tax ideally until October, but if it is November too, that’s fine,” said the minister when questioned On the deadline for approval of the reforms. The minister also stressed that the government’s commitment is still to meet the fiscal deficit target of R $ 139 billion for 2017. “It is our goal,” he said
  • “We are analyzing the reasons for the fall in revenue in the first quarter, which generated this uncertainty in relation to the goal,” said the minister. One of the important causes for the reduction of government revenue, he pointed out, was the decrease in inflation to below the Central Bank’s target. The expectation that inflation will return to a level closer to the BC’s target in 2018 is a factor that will be positive for the collection, Meirelles said. Another factor that contributed to the fall in government revenues, but also shows signs of ending, is the absorption of losses by banks and companies due to the recession of 2015 and 2016. “The tax collection in June has picked up a bit and our expectation is that the resumption of collection can solve this issue (of meeting the fiscal target),” said Meirelles. “But we are watching very carefully and very carefully the evolution of the collection to know if additional measures are necessary.” Source: Estadao

Colombia

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Ence Energía and Celulosa has closed the purchase of the EDF Energies Nouvelles stake in the Lucena (Córdoba) power generation plant, which has a total capacity of 27.1 megawatts (MW). The Spanish group has valued 100% of the plant located in Lucena at 28 million euros. In a statement, the group said that it “trusts to materialize quickly, once it incorporates the implementation of Its management model to the operation of the facilities “. The paper and energy group has executed the operation through a capital and debt acquisition structure that entitles it to 90% of the company’s economic rights. After the operation, Ence increases the installed power of its energy business by 19% and reaches 170 MW of capacity.  The group also plans to achieve “significant improvements” by optimizing the biomass supply to the plant, “supported by Ence’s strong knowledge and management capacity in the field of agricultural and forestry biomass, where it is a leader In Spain, “added Colmenares. The energetic complex of Lucena consumes orujillo as fuel (biomass derived from the treatment of the olive for extraction of the oil), very abundant in the surroundings of the installations, and prunings of olive tree. Source: Expansion

Mexico

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  • Ezentis buys three network infrastructures for € 4.6m. Ezentis has announced the purchase of 100% of the companies Comunicaciones y Sonido México, Ingeniería Celular Panamericana, and GTS Thaumat XXI. In addition, and subject to compliance with certain conditions before the end of the year, Ezentis will acquire Grupo Comunicaciones y Sonido, and the Peruvian company Ingeniería Celular Andina. According to Ezentis, these acquisitions will strengthen its telecommunications network infrastructures business, as well as in the geographical areas of activity, fulfilling the goal of implementation in Mexico. Source: Expansion
  • August 2, 2017. Remittances totaled USD 2.4 billion in June, a 4.5% expansion from the same month last year. The result followed a 4.3% increase in May. On the back of a robust U.S. labor market and the weakness of the peso earlier this year, the 12-month trailing sum of remittances totaled USD 27.8 billion, a 7.3% increase compared to the same period last year. The increase followed a 7.6% expansion in the 12 months up to May. Source: FOCUSECONOMICS

Peru

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  • Peru’s Ministry of Tourism Eduardo Ferreyros is considering the construction of a cable car to improve access to the Inca citadel. “estamos trabajando en distintos accesos, estamos viendo la posibilidad de un teleférico y una entrada vía terrestre por Santa Teresa”. (Ministerio de Comercio Exterior y Turismo – Mincetur). After the fortress of Kuelap in Amazonas received their cable car to support tourism this past March, it seems that the idea has caught on in Cusco. The Ministry of Tourism is currently evaluating the construction of the same mechanism at Peru’s most popular archaeological site of Machu Picchu, This consideration is a result of the congestion that occurs in the entrance area on a daily basis, informs Minister Eduardo Ferreyros. The Ministry of Tourism is also working with the Ministry of Environment and the Ministry of Culture with a focus on creating a 2nd visiting area for the Inca citadel. Source: El Comercio.
  • In an annual study conducted by KPMG and Forbes magazine, the 2017 Global CEO Outlook reports that 84% of Peruvian CEO’s believe their company will see growth in the next 3 years. El Economista informs that innovation, implementation of disruptive technology, and building the public’s trust are the 3 most important strategies for Peruvian CEO’s, according to the report.  Meanwhile, 60% of Peruvian CEO’s expressed concern over increasing regulations restricting business growth related to the increasing impact of politics on their businesses, Andina adds. This optimism reflects a wider regional trend; 86% of CEO’s in Latin America also foresee growth for their companies in the coming years. Source: Living in Peru