The report Key Data for LATAM is elaborated by ATREVIA’s analysis and research team in order to provide the main information to understand the political and business reality of Latin America.
The most outstanding facts this month are:
- The economic plan of Argentina’s government will not be implemented until the negotiation on debt rescheduling with the IMF has concluded. A reform plan, whose details are unknown, because it depends, on the end result of this renegotiation.
- Pension reform has been key to improving Brazil’s situation, but this alone is not enough. The future depends on pushing for reforms to gain in competitiveness and reduce other mandatory public expenditures.
- Mexico’s economy performed poorly in 2019 by closing, for the first time in a decade, with a contraction of 0,1%. Just in the last three months of 2019, when the economy should have greater dynamism, the performance of productive activity was stagnant in real terms. With this economic situation and a 2020 in which GDP is expected to increase by about 1% by 2020, López Obrador’s margin of action is significantly reduced, jeopardizing his popularity, which is still very high.
- In Chile, 2020 will be a year of a sharp slowdown on an economy that was already decelerating and is in the midst of double uncertainty. First, in case there are new outbursts of discontent starting in March, especially after what happened days ago in the Festival of Viña del Mar. And, secondly, by the accumulation of electoral appointments (a plebiscite in April, a constituent election and municipal ones in October and the beginning of the pre-campaign for the presidential elections since November).
- Ecuador faces serious difficulties in generating more revenue: after what happened in the October mobilizations, the government is blocked because it cannot raise taxes, nor reduce fuel subsidies to reduce public spending. This makes markets realize that the fiscal situation is very weak and, as a result, is increasing the country risk.
- In line with the economic tailwind, Paraguay is heading for a long-lasting political truce, as tranquility in the ruling Colorado Party translates into stability in the country. The two major sectors in which Coloradism is divided have reached a truce that could last until 2022.
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