Between 2004 and 2008, Venezuela experienced an economic miracle. Its economy grew 10% on average every year, while GDP per capita expanded by 26%. Now Venezuela is going backwards. By 2018, the country will reach the GDP seen in 2005, but with a population 6 million (20% larger). Continue reading Going Backwards: The Crisis in Venezuela
We examined the 3-year performance of dollar-denominated ETFs of LatAm’s major equity indexes. Spoiler: it looks ugly. Except for Argentina with a stunning 82.2% for the period (22.1% each year), declines range from -38.3% in Mexico to -67.9% in Brazil, which was the worst performer. Continue reading How LatAm Equities Have Performed in USD
Despite a global downturn in commodity prices, inflation in most Latin American countries is going up. Mexico and Costa Rica were the only regional outliers in 2015, but still an uptick is expected for both in 2016. Higher consumer prices have already hastened monetary tightening in some countries; a no-no in a recessionary economic environment. Why is inflation increasing? How are central banks responding? We analyzed consumer price dynamics in selected LatAm countries. Continue reading Why is Inflation Increasing in LatAm?
This year will be one of high political risk in the region. The economic deterioration of the Latin America—the International Monetary Fund (IMF) expects a 0.3% contraction this year—has had, and will continue to have, political consequences. This can be seen in the presidential approval rates of the region’s major economies. Continue reading Political Risk Looms in Latin America
Background: Oil prices have plunged in the last 18 months. Yes, they rebounded sharply on January 21 and 22, but the uptick is far from cleaning the mess. After WTI crude prices fell to a 12-year low of $26.55 on January 20, they surged and closed the trading week at $32.25 per barrel. That is a 21.5% upturn in about 48 hours. That is how volatile prices have been. But the comeback is recent. With the $100-a-Barrel Era gone for a while, how are Latin American countries coping with the new normal? Continue reading The Oil Rout and its Impact on Latin American Countries
Latin America will suffer a recession this year. According to the IMF, regional GDP will contract 0.3% in 2016. This will not only have economic consequences for the next three years, but we will also witness a transformation of Latin American politics that might end with last decade’s division.
Continue reading The Recession in Latin America Will Transform its Geopolitics
We evaluate some of ICA’s debt metrics from 2012 to the 3Q15 to see what went wrong with the company’s debt management.
Continue reading Empresas ICA: The 5 errors that contributed to Default