Latin American economic overview – November 15, 2007

Thursday, 15 November 2007 11:05:12 (GMT+3)   |  

Argentina:

General: The wife of outgoing President Nestor Kircher, Christina Fernandez de Kirchner, won the recent election and will be Argentina's new president. Her husband has been credited with an overall good economic record, but Ms. Fernandez will have to address the resurgent inflation problem and the crisis at the official Statistics Office whose numbers lack credibility after a purge of key employees earlier this year. It is also expected that she will resolve the long-awaited debt settlement of $6.1 billion with the Paris Club (an informal club of creditor nations including the US, Japan and various European Union member states).

GDP: + 8.7% in Q2

Consumer Prices: + 8.4% in October, down from 8.6% in September. Unofficial sources, distrustful of the official numbers, put the inflation rate a lot higher and expect a 20% rate for next year.

Industrial Output: + 0.1% in August

Unemployment: 8.5% in Q2

Trade Balance: + $10.5 billion for the latest 12 months

Currency: Peso 3.13 to US$1 as of November 7 (Peso 3.07 to US$1 a year ago)

Steel Production: 470,000 mt (e) in September, a decline of 2.3% over last year. In the first nine months of the year, 3.9 million mt were produced, or 8.2% less than last year.

 

Brazil:

GDP: + 5.4% in Q2. A growth of 4.7% for 2007 is expected by the Central Bank.

Consumer Prices: + 4.1% in October. For the month of October alone, the increase was 0.3% compared to 0.18% in September. The Central Bank left the benchmark lending rate unchanged at 11.25%.

Industrial Output: + 5.6% in September from a year earlier. Factories are running at close to full capacity.

Unemployment: 9.0% in September

Trade Balance: + $42.6 billion as of October for the latest twelve months. Imports ($12.3 billion) as well as exports ($15.8 billion) reached record levels in October.

Currency: Real 1.73 to US$1 as of November 7 (Real 2.13 to US$1 a year ago)

Steel Production: 2.868 million mt in September, or 4.0% ahead of last year. In the first nine months of the year, 25.0 million mt were produced, an increase of 9.8% over last year.

Special Note: New discoveries of oil reserves could boost Brazil's reserves 60% or by 8.0 billion barrels. Brazil could transform itself to a major crude oil exporter in the next five years.

 

Chile:

GDP: + 6.1% in Q2. For 2007, estimates range from 5.75% to 6.25%.

Consumer Prices: + 6.5% in October (an alarming increase over the 2.1% of October '06). Still, the Central bank left the benchmark interest rate unchanged at 5.75% for the second month in a row.

Industrial Production: + 1.3% in October

Unemployment: 7.7% in September

Trade Balance: + $24.7 billion as of October for the latest twelve months

Currency: Pesos 503 to US$1 as of November 7 (Pesos 525 to US$1 a year ago)

Copper: Chile will produce about 5.54 million tons of copper this year, or 36% of the world's output. The copper price as of November 7 was $3.275 per pound.

 

Venezuela:

GDP: + 8.9% in Q2

Consumer Prices: + 17.2% as of October for the past twelve months. In October alone, prices shot up 2.4%, the sharpest increase in 16 months.

Industrial Production: + 14.1% in July

Unemployment: 8.4% in Q2

Trade Balance: + $23.8 billion as of Q2 for the latest twelve months

Steel Production: 350,000 mt (e) in September or 10.6% less than last year. In the first nine months of the year, 3.673 million mt were produced, or 1.9% less than last year.

Oil/Gas Industry: Petrobras, the Brazilian state-owned energy company, withdrew from a joint venture with Petroleos de Venezuela S.A. (PVSA) to develop Venezuela's Mariscal Sucre natural gas fields. No official reasons were given, but insiders point to doubts about the accuracy of the expected production numbers and the sometimes rocky relationship between Brazil and Venezuela.

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