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South American economic overview - April 7, 2007

Monday, 09 April 2007 10:28:25 (GMT+3)   |  

Argentina:

GDP: final number for 2006 was + 8.5%; for Q4 was + 8.6%

Consumer Prices: the latest number was + 0.8% in March. For the last twelve months through February, the official number was given as 9.5%, but former economic minister Robert Lavagan puts it closer to 15.0%. A private consumer association estimated that food prices went up 12.8% in March alone.

Consumer Spending: + 8.7% in March

Industrial Production: + 2.4% in February

Unemployment: 8.4% in Q4 2006

Debt: old debt of $6.3 bn is to be restructured with the Paris Club (an informal group of creditors mostly from the Group of Seven leading economies), but the Argentinean government rejects any overseeing role of any new agreement for the International Monetary Fund

Trade Balance: + $720 million in February, $12.0 bn for latest 12 months through February

Steel Production: 416,000 mt in February or 6.8% less than last year. For the first two months, total steel production was 751,000 mt or 12.5% less than the previous year.

Currency: Peso 3.10 to US$1 as of April 3 (Peso 3.08 to US$1 a year ago)

Brazil:

General: the Finance Ministry took issue with the Central Bank, claiming that the interest rates are being kept too high at the expense of higher growth rates. GDP grew by a paltry 2.9% last year, whereas inflation is very much in check at 3.14% last year. Despite a 14th consecutive rate cut in March, the benchmark interest rate is still 12.75%.

GDP: 3.8% in Q4; Brazil has introduced a new methodology for the calculation of its GDP and will restate its numbers from 2000 - 2006. It will be based on a broader range, and the numbers are expected to be a bit higher than previously announced.

Consumer Prices: 2.95% in the 12 months through mid-March

Retail Sales: + 8.5% in January from a year ago

Industrial production: + 4.5% in January

Unemployment: 9.9% in January

Debt: debt to GDP ratio is still 68% of GDP, which is higher than the BB medium credit rating. Brazil's current rating is BB or two notches below investment grade.

Trade Balance: + $3.32 bn in March, up from $2.88 bn in February. Total trade surplus in 2006 was $46.08 bn.

Current Account Balance: + $593 million in February, down from $647 million in the same month last year

Steel Production: 2.507 million mt in February, an increase of 17.3% over last year. For the first two months, production was 5.21 million mt or 10.7% above last year

Currency: Real 2.04 to US$1 as of April 3 (Real 2.13 to US$1 a year ago)

Chile:

General: last year, Chile's GDP growth was an unsatisfactory 4.2%, down from 5.7% in 2005. The government intends to accelerate growth in 2007 through a mix of tax breaks and more easily available credit lines. The outlook for 2007 has now been increased to 5 to 6 percent of GDP growth. The benchmark interest rate was kept at 5.0% for the second month in a row. With interest in check and a desired higher growth, this number will likely be lowered in the near future.

GDP: + 5.3% in January (compared to the same month last year).

Consumer Prices: + 2.7% for the last 12 months to March

Industrial Production: + 4.6% in February

Unemployment: 6.4% in February

Trade Balance: $24.4 billion as of February for the past twelve months

Copper Price: $3.39 per pound for May futures. The price has gone up again after dropping late last year and earlier this year. In May 2006, the copper price was $2.49 per pound.

Currency: Peso 537 to US$1 as of April 3 (Peso 521 to US$1 a year ago)

Venezuela:

GDP: + 11.8% in Q4

Consumer Prices: + 18.5% for the 12 months through March (according to the Central Bank), down from 20.4% in February. The Finance Ministry has now put up an inflation target of 10 to 12% for 2007. One measure to achieve this goal is to reduce and eventually eliminate the value added tax.

Industrial Production: + 4.1% in December 2006

Unemployment: 11.1% in January

Trade Balance: +33.0 bn in Q4

Steel Production: 390,000 (e) mt in February, or 6.3% less than last year; for the first two months, 820,000 mt were produced, down 2.6% from last year.

Currency: Bolivar 3,650 to US$1 in "unregulated" trading as of April 2 (Bolivar 2,497 to US$1 a year ago). Central Bank officials have announced that it will lop off three zeros from the current bolivar and launch the new "bolivar fuerte" at the beginning of next year. The official fixed rate is still Bolivar 2,150 to US$1.

Peru:

GDP: + 9.2% in Jan.

Consumer Prices: + 0.2% in Mar.

Industrial Production: + 11.5% in Jan.

Unemployment: 9.5% in Feb.

Columbia:

GDP:  + 8.0% in Q4

Consumer Prices: + 5.8% in Mar.

Industrial Production: + 13.7 percent in Jan.

Unemployment: 13.8 percent in Jan.