Regional GDP growth should post an upturn in 2013 to +3.5% and +3.8% in 2014, after weakening to +2.7% in 2012. However, most of the upturn in 2013 is accounted for by Brazil. Several of the larger economies will show lower growth in 2013 on a calendar basis owing to a strong early part of 2012. The underlying trend for most of the larger economies remains relatively robust, though the region faces headwinds from global demand and remains exposed to a fall in commodity prices. Stresses are also increasing for Argentina and Venezuela faces political uncertainty. With the policy interest rate at a record low, GDP growth in Brazil is likely to accelerate in 2013 and 2014 to +3.3% and +3.8% respectively, after only +1% in 2012. Growth in Mexico should also retain momentum, supported by export demand from the US. The new administration in Mexico will try to make progress on energy reforms. In Chile (+4.3%), Colombia (+4%) and Peru (+6%) growth in calendar 2013 will be flat or lower than in 2012 but the quarterly trajectory should be positive and growth will remain relatively robust, supported by scope for further monetary easing. All five—Brazil, Mexico, Chile, Colombia and Peru—remain well placed systemically to withstand potential headwinds from global demand, commodity prices and short term capital flows. Argentina’s economy has slowed markedly, as growth stalled in Q2, not helped by import constraints to maintain FX reserve levels and there is further uncertainty generated by legal rulings relating to payment of so-called “hold-outs” from the main debt exchange concluded in 2010. In Venezuela, political uncertainty has again risen as President Chavez, due to be inaugurated for another six year term in January 2013, having been re-elected in October, has had to undergo further major surgery for a recurrence of cancer. Both economies will struggle to resume strong sustainable growth without policy shifts and otherwise will need to retain FX controls to maintain adequate FX reserve levels. In Ecuador, another radical left president, Rafael Correa, will stand for another term in elections in February 2013. Paraguay will hold presidential and legislative elections in April 2013._DA
Canada United States Mexico Cuba
Guatemala El Salvador
Belize Honduras
Haiti
Nicaragua Costa Rica
Panama Ecuador Brazil Peru Bolivia Chile Argentina Uruguay Paraguay Venezuela Colombia Suriname Jamaica Porto Rico Trinidad andTobago
Barbados Guadeloupe
Guyana French Guyana
Dominican Republic Martinique
Country Risk Level*
North America USA Canada
Latin America Brazil Mexico Argentina Colombia Venezuela Chile Peru Ecuador Dominican Republic Guatemala Uruguay Costa Rica Panama Bolivia El Salvador Trinidad & Tobago Paraguay Honduras Jamaica Bahamas Haiti Nicaragua Barbados
* as of December 17, 2012 (see methodology page 48) **(1) 42
low low
low low
high low
high low low
high
sensitive low low low low
high low
medium sensitive sensitive high low
high high
sensitive 2011, millions **(2) 2011, millions of $
Economic Outlook no. 1189-1190 |Macroeconomic, Risk and Insolvency Outlook