Colombia Raises Rates; Ecuador GDP Growth Outpaces Forecasts

Bloomberg Línea — Colombia’s Bank of the Republic raised interest rates by 100 basis points to 5%, lower than most analysts expected, and Ecuador’s 2021 GDP growth was 4.2%, exceeding the most recent forecast of 3.55%, the country’s Central Bank reported.

On the region’s stock markets, Mexico’s main index rebounded to post the best performance in Latin America on Thursday, with the S&P BMV/IPC index (MEXBOL) ending the day up 1.29%. The shares that had the sharpest rises were those of Arca Continental (AC*), Controladora Vuela Cia (VOLARA) and Coca-Cola FEMSA (KOFUBL).

Following is a roundup of Thursday’s news from Bloomberg Línea and Bloomberg reporters across Latin America.

Argentina:

• According to Moody’s, the agreement between Argentina and the International Monetary Fund will help the country in the short term to reduce the risk of defaulting on its obligations and increase international reserves.
• The understanding with the organization comes at a time when consulting firms are warning about an increase in inflation expectations and estimate that food prices have risen more than 5.5% in the last month.
• In a climate of ongoing social tension, social organizations demanded more government assistance and mobilized in the country’s capital. Due to inflation, the number of people living in poverty in the country is expected to increase in 2022.

Brazil:

• In a speech at the ceremony for the change of heads of ministries on Thursday, President Jair Bolsonaro defended the Brazilian military dictatorship and the 1964 coup, which took place 58 years ago on Thursday. “Here everyone had the right to come and go, to leave Brazil, to work, to raise a family, to study,” he said.
• The governor of São Paulo, João Doria, announced to his allies on Thursday morning that he will no longer run for the presidency of the Republic and intends to finish his term as governor.

Colombia:

• Thursday was a day of economic news in Colombia, with the Bank of the Republic increasing interest rates by 100 base points to 5%, lower than most analysts expected.
• Unemployment in Colombia dropped to 12.9% in February, although it continues to be higher than the pre-pandemic reference recorded in the second month of 2020, which was 12.2%.

Dominican Republic:

• Avocado is the third largest agricultural export by the Dominican Republic, behind cocoa and bananas, respectively. In 2021, exports of the fruit totaled $77.9 million and Dominican avocado producers could place more fruit in the North American market, taking advantage of the shortage in the United States, a product of the drop in exports from Mexico, but certain conditions must be met.

Ecuador:

• Ecuador’s GDP grew by 4.2% in 2021, exceeding the last growth forecast of 3.55%, the Central Bank reported. Household consumption gave the economy its biggest boost, and which exceeded 2019 levels.

Mexico:

• Mexico will reduce its oil refining capacity and export more due to the current high crude prices, President Andrés Manuel López Obrador said Thursday. The close to one million barrels per day processed in the six refineries of the state-owned company Pemex will be reduced to 850,000 barrels per day.
• The president also said he does not rule out food price controls if inflation does not abate.

Panama:

• Panama is seeking to strengthen its bilateral relations with China, Vietnam, Indonesia and Singapore, the next destinations of Foreign Minister Erika Mouynes. In each of those Asian nations, Moynes will hold meetings with her peers and political authorities.

Peru:

• Moody’s does not see the Petroperu crisis impacting Peruvian finances drastically. For the ratings agency, a scenario in which the Peruvian government assumed the state-owned company’s debt “would not change the relevant debt ratios” of the country.

Uruguay:

• Ripio CEO Sebastián Serrano sees a boom in crypto use following the investment peak in 2021. The company, which launched its operations in Uruguay, aims to be a payment alternative for Argentines, and is about to relaunch in Mexico.

Venezuela:

• State-owned oil company Petróleos de Venezuela (PDVSA) is in talks with companies dedicated to the supply of tankers, according to information published by Reuters, which would allow it to increase its fleet in the event that crude oil exports increase in the coming months.