2021 Economic Projections & LATAM

​Zoom call this morning, Andres Oppenheimer, Editor and Synidcated Foreign Affairs Columnist with The Miami Herald & anchor of CNN En Espanol.

Not like great recession because of economy, but due to induced coma for medical reasons.

Latin America economist- rapid recovery

April: Projections put out twice a year.

U.S. grow 3 %

5.8% next year

China 85% recovery

US 5.9% this year, 

France 4.7%

China 1% this year, 9% next year

Mexico 6%

Columbia 3.7%

Peru 5.2% 

Chile 4.75, 5.2%


2 Peru and Chile fastest recovery, not oil exporting countries

World Bank, Credit:  

  1. Recession unlike 2 previous, induced coma, but not missing any extremities. Patient will be more or less in decent shape. 1929, US and Europe and 2009 financial crises, 9/11; gave huge stimulus package which they haven't done in the past.

  2. China grow 9% next year. Many south american (argentina, ecuador, peru) countries rely on commodities from china

  3. US interest rates expected to stay very low....Huge foreign debts, can offset with huge debts lower interest.

  4. Manufacturing rethinking supply chains and not wanting to be relying on China.  Trump started this 2 years ago.  Now thinking to diversity interests.Threat of sanctions to China.

January, when China shut down, manufacturing found they lacked products to produce. Latin american countries trying to get their own supply chains:  Taiwan, American National countries.  Mexico has many US factories, less cost of goods, same time zone. LATaM may benefit from the shift away from China/diversify interest sources.

Vaccine - boost to consumer confidence. Scientific communities, Late this year or early next year...could be delayed.

Anthony testifiying in front of Senate this morning, danger of more debt.  Gradual and smart openings***.

US 4% population, 28% debt death corona virus.

New wave of capital from Mexico and other LATAM.  World Bank, IMF. Huge 35B outflow, anticipating getting worse. in Feb from LATAM. 

China, Italy, Spain, US, LATAM (lack of water, soap so may get very bad).

Surge in capital:

Mexico - President is a populist, helped business community, doesn't believe in capitalism, may fall 7% this year.

Argentina 2018 - Primary election, 6 months prior to general. Fernandez won by a landslide, 6 months before general election, people began moving their money out of the country.  May see similar in Mexico.

Summary - not great this year, towards end of year things will improve.  US did terrible job managing virus. LATAM will not send money to China. US is still the reference point for LATAM. Lots of changes but world will not come to a stop like 2011 twin towers in NY. Days, weeks, said "world will never be the same, restaurants, sports events, etc"....months later, people started going to restaurants, movie theaters, concerts... 20 years later, airport - tighter security.  Some things will change now: masks, work habits; but world will not come to a stop.

See relatively rapid recovery.

Q: Caribbean: Puerto Rico and Dominican Republic:  good markets, cruise industry. Hospitality hardest hit.

IMF:  Caribbean:  7.5% decline tourist dependent, 6% recovery next year

commodity exporters (oil)  4.6% drop this year, 3.6% upswing next year

Tourism - hard hit, but mixed feelings.  Some say business meetings are over---much work will be done for now. Many companies will go to tele-work, can be productive. Employers believe they can work this way--incentives. Employees happy to work from home 2-3 days/wk, avoiding commute, more time with families. Less traffic. Stage work hours and rotate employees throughout the week.  Rent one floor instead of two.  Conferences, big events won't stop because of networking....sales need to network with potential clients.  

Caribbean will probably start with business meetings.  

Cruise lines: tail end of recovery.

GDP Projections:  6 weeks away from Q2. 

Recovery but will we see 2nd wave. 

Trump political incentive but may start economy too soon*** Getting mixed signals....tells Americans to wear masks, but he doesn't.  Committee/task force.  Recommended to states to slowly open and some states opening (Michigan).

Wait for movies, sports events - open slowly and smartly.

Believe we have taken the largest punch.

NY - capital restrictions. 

Mexico - the last year of every Mexican administration, send money out of country because of fear. Underlying fear.  When Pres elected, appointed Romo as Chief of Staff. Past few weeks, Romo missing in action. President blaming business people for not doing their part and not helping big businesses. Europe-Payroll Protection Plan.  Mexico is pretty much on their own in this crisis.  If massive layoff, President will blame the business sector. Could be RICO referendum next year.  More people will take money out of the country. Clash between President and business community more well known.

Colombia loves Miami. Much like Peru, lives on the edge every 4 years, threat of leftist winning but never happens. President Duckey - 1.6M Venezuelans- opened the borders to V. refugees fleeing from V.dictatorship, burdens Columbia. 

Chile, Peru, Columbia top to recover best.

Brazil - minimized virus at beginning- highest death rate in LATAM 9K people.  5% down, 2% up. Want to impeach Pres Sonaro, but won't happen.  Along V, hardest hit because of very late start, huge population without water, soap, sanitary conditions.

"Best thing about Miami is that it's very close to the United States"