LATIN AMERICAN ECONOMICS

BUSINESS CLIMATE IN LATIN AMERICA REACHES 18-MONTH HIGH 

&

JPMORGAN CONFIRMS EXPANDING ARGENTINE BUSINESS AFTER BARCLAYS LEAVES,

CONTRARY TO WHAT LEADING ARGENTINE DAILY AND OPPOSITION PAPER "CLARIN" CLAIMED

Climate for business in LATIN AMERICA reaches 18-month high; COLOMBIAN economic growth expected to increase; PERU to campaign for EUROPEAN and ASIAN investment

GRADUAL RECOVERY IN ECONOMIC GROWTH AFTER THE FIRST TRIMESTER OF 2013, DUE TO THE RECOVERY OF BRAZIL, ARGENTINA, AND COLOMBIA

The business climate in LATIN AMERICA improved in January, reaching its highest level in 18 months.  This is according to indicators released last Wednesday by the Getulio Vargas Foundation (FGV), a private economic institute, and the University of Munich.

The LATIN AMERICAN Economic Climate Indicator reached 5.5 in January, higher than the 5.0 registered in January 2012.

This was the highest level since July 2011, when the indicator reached 5.6. By October 2011, the indicator had fallen to 4.4 as a result of the deepening international economic crisis.

According to the study, the recent improvement in the business climate is principally attributable to expectations that regional economic growth will continue to increase.

While the regional business climate improved in LATIN AMERICA, some countries saw a decline in their indicator between October 2012 and January 2013.  VENEZUELA saw the greatest decrease in the business climate with its indicator falling from 3.4 to 1.5.  ECUADOR and BOLIVIA also saw their indicators decline.

In BRAZIL, the largest economy in the region, the Economic Climate index fell to 5.9 in January down from 6.1 in October.

PARAGUAY and PERU received the highest evaluations with respect to their facilitating a favorable climate for businesses.  Both received a score of 7.0.

They were followed by 

CHILE (6.6), 

URUGUAY (6.3), 

BRAZIL (5.9), 

MEXICO (5.7), 

BOLIVIA (5.4), 

COLOMBIA (5.3), and 

ARGENTINA (5.2).

VENEZUELA (1.5) and ECUADOR (4.0) received the lowest score.

The FGV and University of Munich data on LATIN AMERICA’S business climate is released every trimester.  It calculates the Economic Climate Indicator based on the average evaluation of 138 specialists in 18 countries.

COLOMBIAN ECONOMIC GROWTH EXPECTED TO INCREASE

Juan Manuel Ruiz, chief economist at BBVA Research’s LATIN AMERICA  division, asserts that the COLOMBIAN economy will recover this year thanks to an improvement in the mining and petroleum sectors. Even more importantly, increased investment in civil works could result in gross domestic product (GDP) growth of over 4 percent.

‘There are preliminary data that suggest [COLOMBIA] is recovering its economic dynamism,’ Ruiz asserted.

Additionally, the Central Bank recently stated that COLOMBIA’S 2012 growth did not reach its potential.  2012 growth numbers are still unknown, but the Bank estimates that the economy grew by approximately 3.7 percent.

Failure to maximise economic output in 2012 has created greater optimism for 2013 growth which is currently predicted to reach 4 percent.

For 2014, the BBVA estimates that COLOMBIA could maintain dynamic economic growth, potentially reaching growth levels of 5 percent.

GRADUAL RECOVERY IN ECONOMIC GROWTH AFTER THE FIRST TRIMESTER OF 2013, DUE TO THE RECOVERY OF BRAZIL, ARGENTINA, AND COLOMBIA

With respect to regional growth in LATIN AMERICA, the BBVA projects growth of 3.6 percent in 2013, up from 2.8 percent in 2012.  For 2014, the projection is even more optimistic: 3.7 percent.

‘There will be a gradual recovery in economic growth after the first trimester of 2013, due to the recovery of BRAZIL, ARGENTINA, and COLOMBIA. This growth will continue on the back of strong internal demand and high primary resource prices,’ according to the BBVA report.

PERU TO CAMPAIGN FOR EUROPEAN AND ASIAN INVESTMENT

PERU will solicit investment from EUROPE and ASIA for projects that are currently being planned for 2013, according to Javier Illescas, director of the Agency for the Promotion of Private Investment (Proinversión).

Illescas specified that the investment promotion campaign will travel to London (UNITED KINGDOM), Frankfurt (GERMANY), Dubai (UNITED ARAB EMIRATES), Beijing (CHINA), Seoul (SOUTH KOREA), Tokyo (JAPAN), and Toronto (CANADA).

According to the director, these countries possess strategically-important companies that specialise in construction and infrastructure.

Illescas stated that PERU will be developing many new projects this year.  Among these will be the construction of a new metro line in Lima, a major road to cross the Andes, and the Chinchero international airport in Cuzco.

In addition to EUROPE and ASIA, the Proinversión campaign intends to increase its activities in AUSTRALIA and NEW ZEALAND, where it hopes to attract businesses interested in investing in PERU.

JPMORGAN CONFIRMS EXPANDING ARGENTINE BUSINESS AFTER BARCLAYS LEAVES,

CONTRARY TO WHAT LEADING ARGENTINE DAILY AND OPPOSITION PAPER "CLARIN" CLAIMED.

By Camila Russo 

JPMorgan Chase & Co. (JPM) is expanding its business in ARGENTINA as the country remains a ``key'' market in the region, the bank’s senior country officer said.

JPMorgan, the largest U.S. bank, is leasing an additional three floors in its headquarters in Buenos Aires and hiring about 15 people this year, Facundo Gomez Minujin said. The New York-based bank has operated its local investment unit in ARGENTINA since 1985, according to its website.

‘‘ARGENTINA remains a key element of our JPMorgan franchise in LATIN AMERICA,” Gomez Minujin wrote in an e-mail. “In the last 12 months we have increased our headcount.” 

JPMorgan is expanding in SOUTH AMERICA’S second-largest economy even as competitors have cut staff and closed divisions amid a tightening of currency controls and financial oversight by President Cristina Fernandez de Kirchner’s government. Barclays Plc (BARC) closed its wealth management office in Buenos Aires in January 2012 “for strategic reasons” while Exotix, a brokerage, last year transferred some staff to New York and London due to regulations. 

Gomez Minujin denied a report published today from Buenos Aires-based newspaper Clarin that the bank was leaving the country by the end of the month. 

“We’re maintaining our presence ARGENTINA just like we always have,” he said in a telephone interview.