broadlooki.blogg.se - Vox videos on latin america

#VOX VIDEOS ON LATIN AMERICA DRIVERS#
#VOX VIDEOS ON LATIN AMERICA PLUS#

External Conditions Index for LAC-7 (ECI)ĭata sources : IMF, National Statistics and Bloomberg. This indicator allows us to classify external conditions faced by Latin America into five regions: very unfavourable, unfavourable, neutral, favourable and very favourable (see Talvi and Munyo 2013 for technical details).įigure 2. The index is quarterly, covers the period ranging from March 1990 to March 2013, and is normalised to take values between 0 and 1. International financial conditions (as measured by EMBI spreads).

#VOX VIDEOS ON LATIN AMERICA PLUS#

Global economic growth (G7 plus China).

#VOX VIDEOS ON LATIN AMERICA DRIVERS#

This index is a weighted average of the three key external drivers identified by Izquierdo, Romero and Talvi (2008): The ECI is intended as a barometer to rigorously measure the pressure that external factors are putting on the region -–either favourable or unfavourable (see Figure 2). To gauge the behaviour of external factors affecting Latin America’s economic performance in a systematic way, we developed the External Conditions Index (ECI). Given that two out of the three relevant external drivers of economic growth facing the region are more favourable today than in the Golden Years, it is not obvious at first glance that the external environment for Latin America has actually deteriorated. This low world interest rate and risk premia environment still sustains historically high capital inflows to Latin America – currently running at more than $290 billon a year, three times higher than the average level observed during the Golden Years, and even above the maximum levels attained during that period. In spite of the recent rise in emerging markets’ bond yields after May’s Fed tapering announcement, they are still currently at 5.1%, a rate which is not only significantly below the 7.4% average of the Golden Years, but also significantly below the minimum rate observed during that period. At the same time, interest rates are low.

Commodity prices are currently 40% above the average prices observed during the Golden Years, and close to the maximum values of the 2004-2008 period.

However, this is not the picture that emerges when looking at other very relevant external determinants of Latin America’s economic performance. For an inattentive observer this fact, taken in isolation, might suggest the region is now facing less favourable external conditions that justify Latin America’s slower growth rates. Global growth rates in 2012-13 declined to 3%, significantly below the growth rates of 3.8% observed during the Golden Years (September 2003-September 2008).

First, take a glance at global output growth.

Is a more hostile external environment responsible for the cooling-off in growth rates that we are observing in the region? Let us look closely at the three key external drivers, one at a time. Data sources: National Statistics and Focus Economics. Golden Years is defined as the period from QIII.03 to QIII.08 and Cooling-Off is the period 2012-13. Notes : LAC-7 is the simple average of Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela, which together account for 93% of Latin America's GDP.