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Forecasts predict that financial markets point positive for 2019 for the economy of the region
In spite of the crisis and the investor distrust for the changes that may happen during the changes of government in Mexico and Brazil, it is predicted a good success in the financial and investment economy of Latin America for the next year, affirms Forbes magazine in a recent analysis.
Leer en español: ¿Cual es el panorama de inversión de América Latina para 2019?
Mexico and Brazil at the top
Mexico and Brazil generate controversy because of their change of government, especially because of the change in their ideological and political perspectives. However, despite the investor distrust that the elections cause for the proposals and tax reforms that may happen, the outlook can be positive.
In the first instance, the ratification of the Free Trade Agreement in the United States Congress and the last G20 summit will be positive for global investors who want to start up their financial projects in Mexico; according to Forbes.
Secondly, Brazil is facing a generally positive reaction from foreign markets before the election of far-right Jair Bolsonaro. According to the Quartz portal, the Bovespa stock market index reached 88,377 points as the markets opened in São Paulo, an increase of 2%, while global markets plummeted the day before the election of Bolsonaro.
For now, the expectations are placed on these great Latin Americans, in addition to the rating agencies, including the research firm Morgan Stanley, estimates the markets of these two countries as stable.
An optimistic panorama
Cesar Manent, partner and co-founder of 5th Street Advisors, assures Forbes that "Latin America has two fabulous demographic attributes that developed countries would like to have: The significant growth of the population and the middle class in progress. Which means that by increasing the middle class, the acquisition of a wider range of products and services will increase."
Manent sees positive to the region in terms of purchasing power, a fundamental aspect for the real estate market, ruled therefore by the real estate phenomenon of young families that emerge to the middle class.
In terms of shares and commercial bonds, the outlook is optimistic, since the financial and banking systems of the region have moderate and conventional strategies that have not needed external support from international sectors for their support or financing; this according to Standard & Poor's, leader in the provision of financial services in America.
According to a November report by Moody's Investors Service, it is expected that the emerging markets during 2019 are fairly stable, however, there are some risks to the political decisions of governments and commercial tensions that may arise.
Manent warns that investors should be prepared for financial volatility in the region during the year and not fall back into the error of grouping the economies of different countries into one, even though it is an economic move that investors commonly make. He proposes, in statements to Forbes magazine, that diversifying markets and being aware that their moves can become unpredictable are points to consider for successful investments.
Latin America facing the world
Manent says that an important matter is the vision and projection of the region in the face of global market situations, specifically the trade problems that the United States and China have, which will affect Latin America and the world in general.
The import tariffs of the two countries keep them in dispute; Latin America is in the middle. Trade agreements between China and Latin American countries hold the United States in suspense. Analysts propose caution to the governments of the center-south cone.
Margaret Myers, director of the program for Latin America and the World of the Inter-American Dialogue working group, assured Portafolio that "the United States is forcing the countries of the region to choose between the United States and China. It is putting Latin American countries in a very challenging position, but at the same time, it does not offer a particularly attractive policy."
LatinAmerican Post | Jorge Becerra
Translated from "¿Cual es el panorama de inversión de América Latina para 2019?"