General: Argentina could well face a tough labor period. Unions representing 70 percent of all registered workers have demanded a 30 percent wage increase in order to match the "real" inflation rate that they claim runs three times higher than the officially reported rate. Last year regular workers received a 22 percent increase in wages, which was probably very instrumental in the current inflation rate -- real or alleged.
GDP: +8.7% for 2007, the fifth straight year of growth in excess of 8%
Consumer Prices: +8.2% in January, less than expected by most experts. As reported, the official numbers are considered suspect ever since the government abruptly changed key personnel at the statistical institute (Indel) a year ago. Even the International Monetary Fund asked for explanations regarding the methodology.
Industrial Production: +8.3% in November
Unemployment: 7.5% in Q3
Trade Balance: +$11.2 billion at end of December for the latest 12 months
Currency: Peso 3.16 to US$1 as of February 13 (Peso 3.10 to US$1 a year ago)
General: Low unemployment and record low bank lending costs have ignited a retail sales boom. Despite a slight increase in the inflation rate, Central Bank officials are not too concerned and have indicated that they will leave the benchmark interest rate unchanged for the time being.
GDP: +5.7% in Q3
Consumer Prices: +4.6% in January; forecasts for 2008 point to 4.26%
Industrial Production: +6.4% in December, the fastest pace in three years
Unemployment: 7.4% in December
Trade Balance: +$38.5 billion at end of January for the past twelve months
Automotive Industry: 254,900 units were produced in January, an increase of 15.5% compared to December 2007 and 24.2% over January 2007. Sales in January fell compared to December but this is a normal development. Traditionally, car sales are strongest in December.
Currency: Real 1.75 to US$1 as of February 13 (Real 2.08 to US$1 a year ago)
General: Even though the Central Bank held the benchmark lending rate at 6.25%, a six year high, it did not rule out future interest hikes to combat an uncomfortably high inflation rate. The country experiences electricity shortages because of less natural gas from Argentina and low reservoir levels reducing hydroelectric power generation. Concern about electricity shortages caused an increase of the copper price.
GDP: +4.1% in Q3
Consumer Prices: +7.5% in January. Last year's inflation was 7.8%, the highest rate since 1996.
Industrial Production: +3.4% in December
Unemployment: 7.2% in December
Trade Balance: + $23.7 billion at end of January for the past twelve months
Copper Price: US$8,145 per metric ton as of February 20 for delivery in three months
Currency: Peso 467 to US$1 as of February 13 (Peso 548 to US$1 a year ago)
Venezuela:
General: Erratic economic policies of the last few years seem to have had a negative impact on the economy despite the undiminished export boom of crude oil. September's yearly growth in industrial production (see below) is in stark contrast to the 12.2 percent expansion from September 2005 to September 2006. Officials of the Central Bank openly admitted that price controls for many items, an overvalued currency at the official rate and the constant threat of expropriation all contributed to an anti-business climate in the country, causing this downturn.
GDP: +8.7% in Q3
Consumer Prices: +24.1% in January
Industrial Production: +2.7% in September
Unemployment: 8.5% in Q3
Trade Balance: +$23.4 billion at end of Q3 for the past twelve months
Currency: Bolivar 4.98 to US$1 as of February 13 (Bolivar 4.23 to US$1 a year ago). This is the rate of the "parallel" market. Some reports have the Bolivar at over 5.00 to the US dollar. The official rate remains pegged at Bolivar 2.15.
Special Focus: Recent news about the Venezuelan oil industry is not encouraging. According to Cambridge Energy Research Associates, crude oil production plunged by more than one third since 1999 from 3.5 million barrels per day to 2.3 million now. The governor of Zulia, the heartland of Venezuela's oil reserves, has described the state owned oil company, Petroleo de Venezuela S.A. (PDVSA), as "paralyzed". Lack of investments and substituting petroleum engineers with military personnel have contributed to the decline. Furthermore, Exxon Mobil Corp and Philips Conoco pulled out of Venezuela rather than being forced to cede majority shares of their Venezuelan operation to the Venezuelan government. In the meantime, Exxon has won court orders in the US, UK, Netherlands and Caribbean to freeze more than $12.0 billion of PDVSA's assets. In short: Venezuela's oil industry is a mess.