Brazil’s Vice President aims at more market-friendly policies

Brazil’s Vice President Michel Temer arrives at news conference in Brasilia, Brazil April 11, 2016.

The rebalancing of Brazil’s depleted public accounts would be done gradually and accompanied with policies that create jobs and raise income under a possible government of Vice President Michel Temer, his top economic adviser told Reuters on Wednesday.

Temer could become Brazil’s next leader in coming weeks as a growing number of disgruntled lawmakers move quickly to impeach leftist President Dilma Rousseff over accusations she broke budget laws.

Wellington Moreira Franco, a confidant of the vice president and coordinator of his party’s economic plan, said the biggest challenge of a Temer administration would be to shore up the country’s finances.

“That fiscal rebalancing will have to be accompanied with incentives to generate jobs and raise income,” said Franco in the offices of Temer’s Brazilian Democratic Movement Party (PMDB) in Congress. “It has to be a gradual adjustment … if not you risk suffocating the population.”

Read the full story on Reuters.

Moody’s: Peru’s GDP to grow 4% this year, 4.5% in 2017

Moody1Moody’s Investors Service Sovereign Risk Group Vice-President Jaime Reusche estimates the Peruvian economy will expand by 4% this year and 4.5% in 2017, surpassing International Monetary Fund (IMF) and World Bank Group (WBG) projections.

The International Monetary Fund (IMF) on Tuesday rose Peru’s economic growth projection from 3.3% to 3.7% for this year; while the World Bank Group raise its projection from previous 3.3% to 3.4%, although it affirmed that Latin America and the Caribbean will remain mired in recession with contraction of 0.9% this year.

Reusche claims that, according to the latest report on Peru and election results, GDP growth in real terms bottomed out in 2014 after a growth rate of 2.4% that year, reached a turning point at the beginning of 2015, and then saw a rebound to 3.3% last year.

Read the full article on andina.com.pe

Carnival Sued Over Cuba Ban on Nationals Sailing to Island

MIAMI (AP) — Carnival Corp. is being sued in Miami federal court over its adherence to Cuba’s policy that prevents Cuban nationals from arriving or departing the island by sea.

Two Cuban-Americans are claiming their civil rights were violated because they were not permitted to buy tickets on a May 1 cruise from Miami to Cuba aboard Carnival’s Fathom cruise line.

The potential class-action lawsuit filed Tuesday asks a judge to force Carnival to allow all people of Cuban origin to sail on cruises to Cuba. The lawsuit was filed the same day Cuban Americans staged demonstrations against the policy outside Carnival headquarters in Doral.

The company says in a statement it must comply with the visa, entry and exit policies of every country, but has lodged a request with the Cuban government to change the ship policy.

Brazil’s worsening crisis to drag on Latin America’s growth: IMF

A prolonged recession in Brazil fanned by political turmoil will drag on economic growth for the next two years in Latin America, a region already reeling from falling commodity prices, the International Monetary Fund said on Tuesday.

In its World Economic Outlook, the IMF revised its 2016 recession estimate for the region to 0.5 percent from 0.3 percent. It would be Latin America’s second straight year of contraction and the worst performance of any region – including the slow-recovering Euro area.

Although the IMF expects most of the region’s economies to pick up steam in 2017, growth will remain moderate given the impact of what could be Brazil’s worst recession in more than a century.

The Fund sees Latin America growing 1.5 percent in 2017.

The worsening political crisis that could oust leftist President Dilma Rousseff in the coming weeks has thrown Brazil further into chaos by slashing investment and consumer spending in what was until a few years ago an emerging success story.

Read the full story on Reuters.

Itau Bank to finance Colombia’s highways

Itau Unibanco Holding SA, Latin America’s biggest bank by market value, is preparing to lend as much as $300 million to companies building a toll road in Colombia, people with direct knowledge of the matter said.

The borrowers are a consortium building the Pacifico 2 highway under Colombia’s 4G infrastructure program, said the people, who asked not to be identified because the negotiations are private. Goldman Sachs Group Inc. participated in a 4G financing in February, when it underwrote a $260.4 million bond for the Pacifico 3 highway.

A government agency provides guarantees in the event tolls fall short of forecasts, allowing banks to book it as if it had Colombia’s sovereign risk and at the same time gain returns of a riskier security, profiting from the difference, two of the people said. The Goldman Sachs deal was rated BBB- by Fitch Ratings, one level below Colombia’s rating.

 Read the full article on Bloomberg.

Schlumberger to limit Venezuela operations on payment problems

Oilfield services provider Schlumberger Ltd said it would reduce its operations in Venezuela due to payment problems, a further sign of the cash crunch facing the OPEC nation because of weak oil markets.

Venezuelan state oil company PDVSA, the exclusive operator of the country’s oilfields, has built up billions of dollars in unpaid bills to service providers as a result of cash-flow problems.

“Schlumberger appreciates the efforts of its main customer in the country to find alternative payment solutions and remains fully committed to supporting the Venezuelan exploration and production industry,” the company said in a statement.

“However, Schlumberger is unable to increase its accounts receivable balances beyond their current level.”

The company said the reduction will take place through this month, allowing for a safe wind-down of operations.

Read the full story on Reuters.

The Stars of the Caribbean

New projections from Cepal show sustained growth in Panama, the Dominican Republic and St. Kitts and Nevis. Brazil is in deep recession and Venezuela is in free fall.

The Economic Commission for Latin America and the Caribbean (Cepal) has released its latest economic growth forecasts for the region’s countries. The United Nations affiliate expects the region’s economy to shrink by an average of 0.6 percent this year.

“This new estimate tells us that the contraction that the regional Gross Domestic Product (GDP) suffered in 2015 (0.5 percent) will extend into the present year,” the Cepal report said.

The growth data for this year show that the region’s stars are in the Caribbean. The countries with the highest growth rates will be Panama, the Dominican Republic and St. Kitts and Nevis.

On the other side, Cepal says, “the economies of South America that are concentrated in the production of primary goods, especially oil and minerals, and that have strong trade ties with China, are headed for a contraction of 1.9 percent.”

CEPAL is projecting a growth rate of 3.9 percent for the Central American economies, down slightly from the 4.3 percent they posted in 2015, and for the English- and Dutch-speaking Caribbean countries they foresee growth of around 0.9 percent in 2016.

Read the full story at Latin Trade.

Innova & Goldman Sachs form JV to invest in Colombia towers

Private equity group Innova Capital and a subsidiary of Goldman Sachs have announced a joint venture to provide funding to Colombian mobile infrastructure developer Golden Comunicaciones and support the development of telecommunication assets throughout the country.

Golden is a member of the Innova Latin American development programme and the financing will be used for the construction of mobile phone towers in the region.

“The investment made by Goldman Sachs and Innova will enable us to reduce the digital divide that exists in our country and undoubtedly will enable us to improve our current network infrastructure,” said Golden CEO Herman Torres.

Based in Bogota, Golden was founded in 2013 by industry veterans with experience in the development, design, construction and operation of telecommunication infrastructure. The company owns and operates towers and other wireless infrastructure and related sites in Colombia.

Fiscal reform key to boost growth in Latin America and the Caribbean

Region faces commodity, demographic shocks. Baseline scenario is 1.5 percent growth in 2016-2018

Weak global growth, a fading demographic boom, lower commodity prices and deteriorating fiscal positions are underscoring the urgent need for major reformulations in fiscal policies of Latin America and the Caribbean, according to the Inter-American Development Bank’s annual macroeconomic report released here today.

Most countries need to trim fiscal spending. However, the report argues against cutting capital investments but rather undertake more fundamental reforms.

“Fiscal adjustments are never easy,” said IDB Vice President Santiago Levy. “Many countries are in the difficult position of having to act now or face more painful adjustments later on. The good news is that there is room to increase spending efficiency and rebalance fiscal policy to improve growth and protect the many social gains that have been achieved over the past decade.”

Read the full article on the Inter-American Development Bank.

LatAm oil exporters urge oil producers to help stabilize market

Delegations from Latin American oil exporters from Colombia, Ecuador, Mexico and Venezuela pose for a photo during a meeting at the UNASUR headquarters in Quito, April 8, 2016. REUTERS/GUILLERMO GRANJA

Delegations from Latin American oil exporters Colombia, Ecuador, Mexico and Venezuela met in Quito on Friday to discuss a proposed output freeze and other methods to bolster international crude prices.

Latin America’s main oil exporters on Friday called on both OPEC and non-OPEC nations to take action to stabilize oil markets, in a timid statement that did not explicitly back an output freeze or offer more aggressive proposals to shore up slumping prices.

Delegations from Colombia, Ecuador, Mexico and Venezuela met in Quito in the run-up to a meeting in Doha on April 17 that oil exporters hope will help reduce a supply glut that has driven global oil prices down by around 60 percent since mid-2014.

The countries in a statement agreed to “call on OPEC and non-OPEC oil producers … to take necessary actions to stabilize the world petroleum market to improve prices for the benefit of producer and consumer nations.”

Read the full article on Reuters.

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