Latin America Brief

Trump has “only” imposed the reciprocal minimum tariff of 10 percent on almost all South American countries. What is the reason for this and what consequences could it have for the region?

Even if he will still change his customs policy, the damage has already been done: Investors are unsettled and will reduce their investments in the country. This will affect German companies in particular.

Because of Trump, the region will seek to expand relations with other partners. China in particular will benefit from this, but Europe also has the opportunity to strengthen cooperation.

President Milei has stabilized the country in a serious crisis. Now he must continue his reform course. A further recovery of the continent’s second largest economy would be important for South America.

Investors are showing a surprisingly high level of interest in new concessions. The government now wants to increase the proportion of private participation in them.

The country is currently readjusting its position in global politics. This could become a strategic advantage for the most important investment location for the German economy in South America.

Despite rising public debt, Latin America’s largest economy is approaching investment grade – a good sign for the entire region.

The Brazilian economy is once again performing significantly better than expected. Nevertheless, financial investors remain cautious in the face of rising government spending.

At present, China could significantly expand its political influence in South America. There are a number of important events coming up in the second half of the year.

Venezuela’s economy could boom in the near future. But this requires the rule of law.

One of the smallest countries in South America is growing at a breathtaking pace. It has overtaken Germany in terms of per capita income. Global industrial groups are very interested in gaining a foothold there.

The country has the largest lithium reserves in the world. However, Western companies have not yet been able to get their hands on them. Companies from China and Russia are further ahead. Now Bolivia could become part of the BRICS.

The future president and her party will have more power than most of her predecessors. The financial markets are reacting nervously to this. German companies continue to back the country.

After Europe and North America, it remains the region with the highest density of democracy in the world. However, the lack of security is the main reason why authoritarian governments are tolerated.

The IMF’s latest forecasts for the region’s economies are cautiously optimistic. And this is where the country with the highest growth worldwide is located.

Hopes for the positive effects of nearshoring were high, but the reality so far has been different. Western companies are hardly relocating, but China is seizing the opportunity.

Many Argentinians wish that the president’s reform program would succeed. He has also become the new beacon of hope for German business and politics.

Brazil is becoming the blueprint for expansion in the industrial value chains and in R&D. This is competition for Western companies in particular.

After the re-election of Nayib Bukule, his policy of a firm hand against crime but also the rule of law could find imitators in the region.

The chances of this are good. Global interest in the region is growing and it remains stable in a world of increasing crises.

The region is increasingly being drawn into the disputes of the world powers and local conflicts are threatening to become geopolitically charged.

President Lula in particular is strongly committed to achieving a result. Will the EU go along?

Guyana, Brazil and Argentina are increasing production, while Ecuador, Mexico, Colombia and Venezuela are losing ground.

The country could benefit more than almost any other from the changes in geopolitics and the energy transition. But this requires a clear reform course.

The government has promised clean elections for 2024. In return, the USA is easing its sanctions. It is uncertain whether President Maduro will keep his side of the bargain.

One against all: Argentina is fighting over water rights on the Río Paraná. After the upcoming elections there, it could become even more difficult to find a common position.

…but with only a third of the population”. Megainvestor Claure believes the region could be in for its best years in a long time.

The country continues to rely on an investment boom due to the decoupling of the USA from China. The potential has only been partially exploited.

Brazil’s Amazon clearing is falling again for the first time. At the same time, President Lula wants to unite South America’s governments to save the rainforest.

EU-CELAC summit brought investment of US$45 billion for the region’s infrastructure and confidence for the EU-Mercosur agreement.

It could bring about comprehensive improvements in the framework conditions for the economy and trigger a growth spurt.

Latin America’s business cities are expensive by international standards – but at the same time offer only medium quality of life.

The outlook for economic and monetary stability is good, but government and congress are wrestling over the course of economic policy.

For environmentalists, the agreement’s protection of the Amazon does not go far enough. At the same time, President Lula is losing his appeal as an integration figure.

Still at the end of 2021, a majority elected the leftist Gabriel Boric. Now, there is a conservative landslide victory in the elections to the Constitutional Council.

Despite economic growth of 2.1 percent, policymakers plan to counter the slowing economy with interest rate cuts.

The most important economies in the region are currently developing in a surprisingly similar way, but have completely different structures.

In South America, the democracies were able to hold their own: This is particularly true of Brazil, Colombia and Chile.

The chancellor’s trip paves the way for closer cooperation with the long-neglected region.

For Brazil, Argentina and Chile, but also for the German economy, the trip sends an important signal.

Mercosur was divided at the most recent summit. Brazil urgently needs to provide impetus for a new integration of South America.

For four years, the country was an international pariah. That is changing. The German economy should keep an eye on Venezuela again.

A more agile funder with more risk appetite and capital would be an asset to the region.

The country’s democratic institutions have recently been put to the test, but they have held their ground.

Growth prospects are dimming, but the region is already much further ahead than Europe or the USA in fighting inflation.

Right-wing conservatives will dominate Congress and the states, even though a new president has not yet been named.

With 2.6 percent GDP growth, low unemployment, a stronger real and high investment inflows, the outlook is favorable.

Ahead of the constitutional decision in Chile and the elections in Brazil, investors are hesitant to commit. The outlook for growth is also gloomy.

The inauguration of President Petro in Colombia, the referendum on the new constitution in Chile and crucial elections in Brazil are on the horizon.

A free trade zone has just been agreed with Singapore and Uruguay wants to open up to China, while the EU and EFTA are holding back.

In times of inflation, bitter experience has probably led to early countermeasures being taken there.

Nevertheless, investors seem to choose the region because of the size of the domestic markets.

If the region can become an attractive alternative by improving the business climate, infrastructure, and logistics.

Representatives of the traditional parties are currently having a hard time at the ballot box. But can the surprise winners deliver on their promises?

Washington is struggling to gather the region’s heads of state for the Summit of the Americas. The countries have been neglected too much – a warning for the EU as well?

Even though the systems are under heavy pressure, Latin America remains the region with the highest density of democracies after North America and Western Europe.

Because of its wealth of raw materials, energy resources and agricultural products, the region is becoming hotly sought after – this development must not be overlooked.

Recent government measures are not only a cause for concern in the economy, but finances nevertheless remain stable.

Mexico and Brazil also condemned the invasion of Ukraine at the UN General Assembly. The economic impact is still uncertain.

Despite omicron and high inflation, foreign investors are betting on the region. This increases purchasing power, among other things.

In the current confrontation of China and Russia with the West, South America could move away from Europe.

Brazil, Argentina and Peru have now the opportunity to become more attractive as business and investment locations through OECD membership.

However, individual economists see high inflation as a greater threat to growth in the region than the new covid wave.