FocusEconomics Insights - Latest Posts

• What’s the future of U.S.-Latin America trade relations?

  August 17, 2017

  What a renegotiation of NAFTA could mean for Mexico, and for the economies of Latin America as a whole, has been at top of mind for markets and the region since 18 May when U.S. Trade Representative Robert Lighthizer sent formal notice to Congress of the administration’s intention of renegotiating the agreement.

  *Guest blog post from Latinoamerica21. 

  President Trump has repeatedly stated that the main objective of his trade policy is to reduce trade deficits with several of the U.S.’ trading partners and to review 20 of its agreements that contain "possible abuses and violations." The executive order explicitly states that all trade relations and preferential trade programs must contribute favorably to the United States’ trade balance and strengthen its manufacturing industry. Yet many of the agreements are failing in this regard.

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  Tags: Latin America, NAFTA, United States

• Taxes or cutbacks? Latin America's challenge of sustaining spending without causing debt to skyrocket

  August 10, 2017

  This year’s economic outlook for Latin America and the Caribbean is optimistic. However, in 2015 and 2016, the region experienced a deep economic recession, which was felt across all of the countries in the region, although it affected Brazil, Argentina and Venezuela in particular. Against this backdrop, how was it possible for the region to sustain the social advances it had achieved in the decades before the recession?

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  Tags: Latin America

• Are uranium prices making a comeback?

  July 19, 2017

  Uranium, the silvery radioactive metal, is a very important element because of its use in generating electricity in nuclear power stations. As the world moves on from the Fukushima disaster, nuclear power may be making a comeback and consequently, so may uranium prices. Nonetheless, the price is currently down around 25% from the same time last year having plummetted over 40% in 2016 according to a report by Frik Els of Mining.com. A uranium supply glut and falling demand along with negative sentiment based on a series of events in early 2017 has kept the price low, but analysts are becoming bullish on the medium and longer-term outlooks for uranium despite the metal still technically in a bear market.  

  

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  Tags: Energy Commodities

• Taxing the Economy: Achieving a Delicate Balance

  July 18, 2017

  The study of macroeconomics is an interesting one, as it explores the behaviour of the aggregate economy and the complex relationships that exist between factors such as inflation, interest rates and the underlying value of currency.

  The impact of taxation within the economy makes for an equally interesting study particularly over the course of modern history. This seems even more relevant in the modern age, with Donald Trump's proposed tax plans expected to slash corporate taxes and trigger a boom in the business world.

  More specifically, Trump's proposed corporate tax reforms would lower the maximum rate for small and medium-sized businesses from 38% to 15%. The new President has also proposed a one-time repatriation on any income that corporations earn overseas, with a potential rate of 10% enabling U.S.-based businesses to reinvest money back into the American economy.

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• Is the UK really "shackled to a corpse"?

  July 11, 2017

  Over the last year and change, the economic outlook for the Eurozone has improved dramatically while in that same time the UK economic outlook has left much to be desired.

  A little over a year ago, Brexit campaigners proclaimed that if the UK did not leave the European Union it would be "shackled to a corpse." A year on from the Brexit-vote and that looks far from the truth as the health of the Eurozone economy looks better than it has in some time. Read our latest economic outlooks for the UK and the Eurozone below.

  

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  Tags: European Union, Infographic

• How will Latin America’s upcoming lengthy election cycle affect the reform agenda and credit ratings?

  July 6, 2017

  Latin America will soon enter into an electoral cycle that will last about a year and a half and, depending on the results, some countries could face difficulties in terms of their credit ratings. This is because of one important factor: The ongoing fiscal consolidation continues to be a challenge for many governments that are facing a context of low economic growth and lower tax revenues, especially those related to low commodity prices, which makes it even more difficult to curb the current debt dynamics in the region.

  *Guest blog post from Latinoamerica21. 

  Presidential elections are scheduled in seven countries: Brazil, Chile, Colombia, Costa Rica, Mexico, Paraguay and Venezuela. All of the countries, with the exception of Venezuela, will see their current presidents’ terms ending and new leaders taking on the role. In addition, congressional elections will be held in Argentina— which could test Mauricio Macri’s reform agenda—and in El Salvador, where months of political paralysis has led to a significant decline in sources of funding for the government in addition to a debt default.

  

  Click on the image to open a larger version

  The elections will be of particular importance for the future of credit ratings for countries that have a negative outlook: Brazil, Chile and Mexico.

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  Tags: Infographic, Latin America

• How will emerging market economies perform in 2017?

  July 6, 2017

  On 4 July, a Goldman Sachs executive appeared on CNBC to discuss investing in emerging markets. According to her, emerging markets may be a better investment than the U.S. despite growing concerns over higher debt levels and a stronger USD, U.S. market's may actually offer more uncertainty than emerging markets.

  "Look at what's going on in the U.S. If you think about the moves in the U.S. both in the fixed income and equity markets there's a lot hinging on policy options which may or may not occur. Does tax reform going to happen? What happens to health care? What happens to infrastructure?"

  With that said, we brought back our emerging markets economic outlook. Read our latest summaries for the emerging markets below.

  

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  Tags: Emerging Markets

• Chilean Economy in Focus: Interview with Senior Economist of the Chamber of Commerce of Santiago

  July 5, 2017

  Chile's economy has slowed in recent quarters, as the once booming mining sector has performed poorly and fixed investment has fallen sharply, taking business and consumer confidence with it. These issues continue to plague the economy as we move into Q3, with that in mind FocusEconomics Economist Oliver Reynolds interviewed Senior Economist for the Chamber of Commerce of Santiago, Maria del Pilar Cruz, about the potential future of the all-important mining sector as well as future economic growth prospects, President Bachelet's reforms, and inequality in Chile.

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  Tags: Latin America

• CEOs Rank Top Economies for Growth Opportunities

  July 4, 2017

  Where do CEOs see the most important prospects for business growth in the next 12 months? The U.S., China and Germany top the list, according to PwC Global’s 20th annual CEO Survey of nearly 1,400 CEOs from around the world. The UK, Japan, Brazil, India, Mexico, France and Australia round out the list of the top 10.

  

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  We took closer look at what economic analysts see on the horizon for these economies in the next 12 months:

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• The Mobile Ecosystem & Latin America's Economy

  June 28, 2017

  Guest blog post from Latinoamerica21*

  Mobile technologies and services generated 5% of Latin America's GDP in 2015 and nearly 2 million jobs, direct and indirect. In addition, the mobile ecosystem has contributed USD 40 billion to the public coffers for tax purposes, according to the report, The Mobile Economy Latin America and the Caribbean 2016, from the GSMA which represents the interests of mobile operators around the world.

  

  Click the image above to open a full-size version

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  Tags: Infographic, Latin America

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