The 2012 Reuters Latin American Investment Summit showed a clear contrast between the message the region’s leaders want to send to the world and what the numbers say.
Finance ministers and central bankers interviewed in the summit said Latin America is still well equipped to face another global economic downturn, but businessmen and analysts fear the governments now have less room to move on fiscal and monetary policy than in 2007.
Mexico’s Central Bank Governor Agustin Carstens said the country is in a better position now given record international reserves and a more solid private sector, while Brazil’s Finance Minister Guido Mantega insisted the region’s major economy is now gaining steam. And Chilean President Sebastian Pinera acknowledged the economy is already being impacted by the global crisis, but affirmed the GDP growth outlook for 2012.
The Summit also helped investors understand why Mexican stocks are drawing investors away from Brazil and gave hints about which local banks could end up acquiring the $55 billion BBVA pension funds business in the region.
Major banks such as JPMorgan and Santander referred to Reuters in their reports to clients, pointing out the decision announced by Colombian finance minister to issue all global and domestic bonds planned for this year even if the funds are not needed. The Chilean central bank governor’s comments on his neutral policy bias despite the foreign turbulence was reproduced by Goldman Sachs in a note to clients.
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