20170923-法国巴黎银行-LATAM_CHARTBOOK_97页_3mb

LATAM CHARTBOOK Summary

Core Content Overview

This document provides a comprehensive macroeconomic outlook for Latin America (LATAM) and individual countries in the region, including Brazil, Mexico, Colombia, Chile, and Argentina. It discusses economic performance, inflation trends, monetary policy, fiscal balances, exchange rates, and investment dynamics, with a focus on the period from 2017 to 2018.

Main Points

Global Context

• The global economy is showing signs of improvement, with a composite leading indicator reaching long-term average levels.
• Global monetary policy is gradually moving away from accommodative measures.
• The US dollar has peaked, and its weakening is expected to improve emerging market (EM) sovereign ratings.
• Commodity prices and capital flows significantly influence LATAM economies.

LATAM Economic Overview

• LATAM economies are relatively closed compared to global standards.
• Inflation rates have generally declined across the region, though not uniformly.
• Growth has slowed from previous years but is expected to recover in 2018.
• Commodity exposure varies by country, affecting their economic performance.

Country-Specific Insights

Brazil: Looking Up

• Real GDP growth is expected to recover into 2018.
• Inflation has fallen below the target for the first time in many years.
• Consumer and business confidence is improving.
• Credit from public sector banks is shrinking after years of growth.
• Non-performing loans are expected to moderate with economic recovery.
• Unemployment rate has peaked, with gradual improvement expected.
• The unemployment rate is a key indicator of economic health.
• The current tax burden is high relative to per capita income.
• The current government spending cap is expected to reduce the debt-to-GDP ratio over time.
• Brazil's retirement system is very generous, with high pension spending.
• The market consensus on inflation and interest rates is aligning with BNP Paribas' forecasts.
• The central bank is expected to cut rates further in 2018.

Mexico: Changing Gears

• Growth is resilient, with moderation expected in 2018.
• Inflation is peaking, with core inflation moderating.
• The central bank is expected to cut rates in 2018 as inflation slows.
• Fiscal balances are improving, with progress in both revenues and spending.
• Mexico's economy is heavily reliant on oil revenues, which have declined.
• The peso has weakened, but this is expected to stabilize as inflation eases.
• The trade balance has improved, with a reduced deficit in non-oil sectors.
• FDI remains relatively stable, while other capital flows are volatile.
• Sovereign ratings have been upgraded over time.
• The 2018 presidential election is expected to be competitive.
• The lower house election is also significant, with political coalitions influencing policy.

Colombia: Steady as It Goes

• Economic activity is adjusting to a new reality, with FDI diversifying away from oil and mining.
• Inflation has fallen but remains sticky, with core inflation above target.
• The central bank is expected to cut rates further to 4% by end-2018.
• Fiscal policy shows growing pains, with a nominal deficit expected to remain around 4% of GDP.
• Revenue growth has fallen to negative territory, even after tax reforms.
• The economy is expected to grow steadily in 2018, though growth is still below potential.

Chile: Growth Acceleration in the Horizon

• Chile is expected to see growth acceleration in H2 2017, reaching levels close to potential in Q4.
• Consumer sentiment has edged up, but business confidence remains low.
• Inflation has moderated, with the central bank likely to keep rates on hold.
• Non-tradable inflation remains slightly above the official target.
• The economy is expected to grow steadily, with inflation expected to decline further.

Argentina: In Recovery Mode

• Argentina has experienced a full year of real GDP growth, with acceleration expected in 2018.
• Inflation has peaked, and the trend is downward.
• The central bank has tightened its monetary policy, delaying rate cuts.
• The mid-term elections are in the spotlight, with a positive image of politicians and opposition fragmentation likely to benefit the incumbent coalition.
• Investment outlook has improved, with capital goods imports and gross fixed investment rising.
• The economic outlook is positive, with growth and inflation expected to stabilize.

Key Information

• Growth Expectations: The overall LATAM region is expected to grow at 1.6% in 2017, with a projected increase to 2.6% in 2018 and 2.5% in 2019.
• Inflation Trends: The region's inflation rate is expected to decline from 6.2% in 2017 to 4.7% in 2018 and 4.1% in 2019. Argentina's inflation is expected to decrease from 20.0% in 2017 to 12.0% in 2018 and 8.0% in 2019.
• Monetary Policy: Central banks in the region are adjusting their rates based on inflation trends and economic performance.
• Fiscal Policy: Fiscal balances are improving, but challenges remain in managing public spending and revenues.
• Exchange Rates: The USD has weakened, leading to weaker Latam currencies, but this is expected to stabilize.
• Investment and Trade: FDI remains resilient, while capital flows can be volatile. The trade balance has improved, especially in non-oil sectors.
• Political Context: The 2018 presidential and congressional elections are significant for policy direction and economic stability.

Summary of Key Indicators

Conclusion

The document highlights a generally positive outlook for LATAM, with growth expected to recover and inflation to moderate in 2018. Each country has its unique challenges and opportunities, with Brazil and Argentina showing signs of recovery, while Mexico and Chile are expected to see growth acceleration. The region's economic performance is influenced by global trends, domestic policies, and political developments.