Chávez should get credit for economic miracle

Venezuelan President Hugo Chávez’s critics have taken advantage of his nearly three-week absence for treatment of an undisclosed illness in Cuba to blame him for all kinds of misdeeds, but it’s time to give him credit for having performed a true economic miracle in his country.

I’m not kidding. What Chávez has done in Venezuela over the past 12 years is nothing short of an economic miracle: despite benefiting from the biggest oil boom in Venezuela’s history, he has somehow managed to turn the country into shambles.

Slowing Inflation Unifies Traders’, Economists’ Rate Bets: Mexico Credit

Mexican traders and economists are pushing back their forecasts for interest-rate increases to next year, reaching a consensus for the first time in eight months as inflation slows in Latin America’s second-biggest economy.

Yields on the 28-day interbank rate futures due in January, known as TIIE, dropped 15 basis points, or 0.15 percentage point, in the past month to 4.99 percent, indicating traders are betting central bank Governor Agustin Carstens will wait until that month to raise the benchmark rate. Economists moved their forecast for a rate boost to March from January, according to a survey by Citigroup Inc.’s Banamex unit on June 20.

Biggest Bond Rally in 10 Months Fueled by Slowing Inflation: Mexico Credit

Mexican bonds are posting their biggest gain in 10 months on speculation slowing inflation will prompt the central bank to keep interest rates at a record low.

The yield on the government’s notes due in 2024 dropped 22 basis points in the five days ending June 24, the biggest weekly slide since August, to 7.07 percent, according to data compiled by Bloomberg. In Brazil, yields on the country’s real- denominated bonds maturing in 2021 climbed nine basis points, or 0.09 percentage point, during the same period, to 12.41 percent.

Analysis: "Lulismo" appeals in Latin America but hard to copy

(Reuters) - It was a political pilgrimage that surprised no one.

Within days of winning Peru's presidential election, Ollanta Humala flew to Brazil to learn more about its success over the past decade and meet former President Luiz Inacio Lula da Silva, who inspired Humala's journey from the radical left toward the political center.

China Fuels Latin America’s Biggest Debt Rally by Financing Ecuador Budget

Ecuador’s bonds are rewarding investors with the best performance in Latin America as Chinese loans and higher oil prices boost confidence in the economy two years after the country defaulted on $3.2 billion in debt.

Ecuadorean dollar debt has returned 13 percent this year, compared with 5.2 percent for Latin American sovereigns on average, according to JPMorgan Chase & Co. Yields on bonds due 2015 fell 238 basis points, or 2.38 percentage points, this year to 9.59 percent. Similar maturity Brazilian bonds yield 1.9 percent, down 97 basis points from the end of December.

Mexico Prices Unexpectedly Fell 0.05% in First Half of June Led by Food

Mexico’s consumer prices unexpectedly declined in the first half of June, dragged down by food and beverage costs in Latin America’s second-biggest economy.

Prices fell 0.05 percent in the first two weeks of the month, the central bank said in a report posted on its website today. Economists forecast a 0.11 percent rise, according to the median estimate of 14 analysts surveyed by Bloomberg.

Hedge Funds Pare Bullish Peso Bets as Record Rally Fizzles: Mexico Credit

Hedge funds and other investors are cutting their bullish bets on the Mexican peso by the most in 10 months on concern a slowdown in the U.S. economy will crimp demand for the Latin American country’s exports.

Wagers on the peso strengthening against the dollar outnumbered bets on a decline in the futures market by 48,163 contracts last week, down 47 percent from the same period ended June 7 and the biggest percentage decline since August, according to the Commodity Futures Trading Commission. The slump in the peso over the past month helped spark a 1.6 percent loss in dollar terms in local-currency Mexican government bonds, according to Bank of America Corp. Brazilian real-denominated notes gained 2.7 percent in the same period.

Latam stocks up after Brazil debt upgrade

SAO PAULO, MEXICO CITY, June 20 (Reuters) - Latin American
stocks rose on Monday after Brazil's debt was upgraded by
Moody's, although investors were cautious given concerns Greece
may struggle to convince Europe to give it more financial aid.

The MSCI Latin American index .MILA00000PUS edged up 0.47
percent, rising for the second session. The index bounced off
its lowest since September last week after fears deepened last
that a Greek debt default could spur a global financial
crisis.

Colombia central bank ups interest rate; pause seen

(Reuters) - Colombia's central bank on Friday raised its benchmark interest rate by 25 basis points to 4.25 percent, but analysts detected signals pointing to a pause in the bank's rate-hiking campaign this summer.

A majority of the bank's seven-member board voted for the hike, breaking with the board's consensus stance between February and May, when it raised rates monthly like other South American countries battling to control inflation.

Urban marketplaces, long common in Latin America, flourishing in Cuba amid economic changes

HAVANA — Marketplaces full of vendors hawking everything from food to religious items may be common sights across Latin America, but they’re springing up for the first time in the Cuban capital as the island’s Communist government opens its tightly controlled economy to some private-sector activity.

Nearly 140 official points of sale in abandoned structures, parking lots and crumbling old buildings have been established in recent months and are accommodating about 2,600 independent vendors, the Communist Party newspaper Granma reported Friday. The number of markets “should grow steadily,” Luis Carlos Gongora, vice president of Havana’s Provincial Administration Council, told the newspaper.

Analysis: Latam gets grip on inflation, Asia giants struggle

(Reuters) - Latin America is getting the upper hand on inflation that once ravaged the region but central banks in some of Asia's heavyweight economies are having a tougher time.

The question of who will win the battle of balancing policy to achieve optimum growth and inflation levels remains an open one, simply because potential price pressures from rising wages and demand are more elevated in India and China than in some of their Latin American peers.

Chile Slows Pace of Interest Rate Increases as 5.25% Nears ‘Neutral Level’

Chilean policy makers yesterday slowed the pace of interest-rate increases as growth in South America’s fifth-biggest economy eases and inflation expectations decline.

The central bank’s five-member policy board, led by bank President Jose De Gregorio, raised the overnight rate by a quarter-point to 5.25 percent, matching the forecast of 16 of 19 economists surveyed by Bloomberg. Two analysts expected a fourth straight half-point increase and one forecast a pause.

Latin America’s candidate to head IMF speaks out

What irony! Despite all their grandiose rhetoric about Latin American unity, Brazil, Argentina and Chile have not yet come out in support of Agustín Carstens, the Latin American candidate to head the International Monetary Fund.

Earlier this week, I asked Carstens, a Mexican, whether he is disappointed that the three South American countries have failed so far to support his candidacy to succeed Dominique Strauss-Kahn, the former IMF chief who resigned after being charged with sexually assaulting a New York hotel maid.

China's Xi wants greater trade with Latin America

SANTIAGO, June 10 (Reuters) - Chinese Vice President Xi Jinping promised on Friday to press Chinese firms to step up investment in Latin America, as the world's No. 2 economy seeks to boost economic ties with the commodity-rich region.

Wrapping up a low-key Latin American tour that also took in Cuba and Uruguay, Xi said he wanted to increase trade volumes with Latin America, a major source of raw materials like copper.

Brazil in fourth interest rate rise

São Paulo, Brazil (FT) -- Brazil's central bank has increased rates for the fourth time this year to curb a rise in inflation amid tight labor market conditions.

The central bank on Wednesday evening boosted the benchmark Selic interest rate by 25 basis points to 12.25 per cent and maintained its strategy of a "prolonged" adjustment to deal with an inflation rate that has exceeded the upper limit of the official target range of 6.5 per cent.

EMERGING MARKETS-Latam FX weakens on global growth worries

MEXICO CITY/SAO PAULO, June 8 (Reuters) - Major Latin American currencies weakened on Wednesday as concerns about slowing U.S. growth and slim chances for further stimulus in the United States pushed investors to dump riskier assets.

Federal Reserve Chairman Ben Bernanke said late Tuesday the U.S. recovery remained fragile. Bernanke's comments followed a spate of economic data pointing to a slowdown in the world's biggest economy.

Cuba, China strengthen economic ties

Havana – Cuba and China signed in Havana 10 economic accords and memorandums of agreement in the areas of finance, oil, communications, information technology and other technical fields, in a move to strengthen bilateral relations.

The agreements were signed in the presence of Cuban head of state Raul Castro and visiting Chinese Vice President Xi Jinping.

Chile growth slows in April, small rate hike seen

SANTIAGO, June 6 (Reuters) - Growth in Chile's economy
slowed to 0.3 percent in April compared to March, the central
bank said on Monday, bolstering views that the bank will raise
its interest rate in June but at a slower pace.

The bank revised upward its IMACEC indicator of economic
activity to 0.6 percent in March against February, originally
reported as a 0.3 percent rise.

Brazil launches scheme to lift millions out of poverty

Brazil has launched a welfare scheme to lift millions out of extreme poverty by 2014, which President Dilma Rousseff calls her government's key priority.

The project aims to build on current programmes, which are credited with raising 20 million Brazilians out of poverty over the past decade.

Brazil’s Quickening First-Quarter Growth Challenges Effort to Cool Economy

Brazil’s economy gained speed in the first quarter, challenging President Dilma Rousseff’s efforts to cool growth and bring inflation to its target by next year.

Gross domestic product expanded 1.3 percent in the first quarter from the previous three-month period and 4.2 percent from a year earlier, the national statistics agency said today in Rio de Janeiro. Both figures matched the median forecasts of economists in a Bloomberg survey. Growth in the fourth quarter of 2010 from the previous three months was revised to 0.8 percent from 0.7 percent.

Brazil's Economic Boom Advances in First Quarter

RIO DE JANEIRO—Brazil's economy continued to expand at the start of 2011, fueled by record-low unemployment and higher wages that allowed families to boost spending.

Brazil's gross domestic product expanded 4.2% in the first quarter compared with the first quarter a year earlier, the Brazilian Census Bureau, or IBGE, said Friday. That was below the 4.5% median forecast made by eight economists polled by Dow Jones Newswires and down from year-on-year growth of 5% in the fourth quarter. But Brazil's economic boom actually gained steam in the first quarter, surging 1.3% compared with 0.8% growth in the fourth quarter, the IBGE said.

Latin America: The Quest for Talent

Some Latin American countries are now experiencing a “reverse” brain-drain.

BY JERRY HAAR
AND MARIA PRADILLA

In an increasingly competitive global environment, major firms know that talent recruitment and cultivation is an urgent challenge. Latin America is no exception. For example, Brazilian multinational firm Vale do Rio Doce has increasingly promoted people in their mid-30s to direct large projects, and it is ramping up its in-house training so those employees can qualify for the higher positions sooner. Thus, it is spending around $100 million with its global training programs in 2011, around 30 percent to 50 percent more than last year.