Argentina:
General: Argentina is in the middle of an election campaign, and the government's official figures on inflation have become a hot issue. Opposition candidates claim that inflation runs as high as 20%. President Kirchner's wife is the leading candidate and runs on the strong economic record of her husband. However, ever since the Kirchner administration made wholesale personnel changes at the statistical agency, official inflation data have become suspect. On the brighter side, the government has moved closer to a debt settlement of $6.0 billion with the Paris Club (creditor countries such as the US, Germany, France and Japan).
GDP: + 8.7% in Q2
Consumer prices: + 8.6% in September (10.4% a year ago), slightly down from the previous month. At the request of the government, leading supermarkets have agreed to lower prices for essential food items by 5%.
Industrial Production: + 0.1% in August; construction grew by 5.4% in August over last year
Unemployment: 8.5% in Q2, the lowest rate in almost 15 years
Trade Balance: + $10.2 bn as of August for the latest twelve months
Budget Surplus: + Pesos 2.72 billion in August or 23% higher than last year
Currency: Peso 3.16 to US$1 as of October 10 (Peso 3.11 to US$1 a year ago)
Steel Production: 355,000 mt (e) in August or 23.5% less than last year. In the first eight months of 2007, 3.3 million mt were produced, or 12.4% less than last year.
Brazil:
GDP: + 5.4% in Q2
Consumer Prices: + 4.15% in September (3.7% a year ago), slightly down from 4.18% in August. Experts were relieved to see a reversal in the inflation trend after it had gradually inched up from March's low of 2.96%.
Industrial Production: + 6.5% in August
Unemployment: 9.5% in August
Trade Balance: + $43.1 bn as of September for the past twelve months
Currency: Real 1.80 to US$1 as of October 10 (Real 2.15 to US$1 a year ago)
Steel Production: 2.94 million mt in August, or 4.5% ahead of last year's pace; in the first eight months of the year, 22.1 million mt were produced, or 10.6% ahead of last year.
Chile:
GDP: + 6.1% in Q2; in August the growth rate slowed to 4.5% compared to a year earlier.
Consumer Prices: + 5.8% in September (2.8% a year ago). Economists expressed concern about the increasing inflation rate and point to the overnight benchmark interest rate, which they consider as too low to fight inflation. This month, the Central Bank left the rate unchanged at 5.75% after three consecutive increases.
Industrial Production: + 4.0% in August
Unemployment: 7.6% in August
Trade Balance: + $ 24.1 bn as of September for the last twelve months
Currency: Peso 497 to US$1 as of October 10 (Peso 537 to US$1 a year ago). This year, the Bolivian Peso has appreciated in excess of 7% compared to the US dollar.
Copper Industry: Driven by demand in China, the copper price this year has appreciated 26% and now trades at around $7,940 per-ton for delivery in three months. Copper production in August dropped by 5.4% to 429,238 tons, the lowest production since February. Still, it is expected that this year, total copper output will slightly exceed last year's. The government has announced plans to invest up to $17.0 billion into the mining (mostly copper) industry in the next five years.
Venezuela:
GDP: + 8.9% in Q2
Consumer Prices: +15.3% in September (unchanged from last year)
Industrial Production: + 11.2% in June
Unemployment: 8.4% in Q2
Trade Balance: + $23.8 bn as of Q2 for the last twelve months
Currency: Officially, the bolivar is still pegged at 2,150 to the US$1. The rate for the "unregulated" currency trading stands at bolivar 5,350 to US$1.
Special Trade Focus: The idea of an all-embracing Free Trade Area of the Americas (FTAA) has become very unpopular with a majority of members of the US Congress. Consequently, Mercorsur, South America's largest trading block led by Brazil, has backed away from the FTAA and will instead focus in the Doha round of World Trade Organization (WTO) talks.
This lack of progress has prompted some countries to negotiate bilateral free trade agreements (FTAS) with the US, albeit with varying success. A FTA between the US and Peru is expected to be approved by the US Congress still this year. President Garcia of Peru reckons that this agreement will add a full percentage point to Peru's current GDP growth of 8.0%. The Central American Free Trade Agreement (CAFTA-DR), including the Dominican Republic, was just passed by the US Congress by two votes, but FTAS with Panama and Colombia are still deadlocked in Congress. It is rumored that Colombia's chances of an FTA with the US are not good. This would have dire consequences for Colombia. A study by the University of Medellin estimates that if the agreements with Peru and Panama were to be approved by the US Congress and Colombia's not, trade and investments from the US would be diverted away from Colombia. Consequently, Colombia's GDP would be reduced by 2.2% and up to 400,000 jobs would be lost. In the end, only an all-inclusive free trade deal under the WTO Doha round or adoption of the FTAA would eliminate these regional inequalities.