March 1, 2019


1. AMLO and business sector reach agreement to boost Mexican economy

During the 36th Annual general meeting of the Business Coordinating Council (CCE), President López Obrador took up the sector’s proposals to invest in order to grow Mexico’s economy by 4%, as well a commitment to end poverty over a six-year period.

Moreover, the President lauded the business sector’s support for his historic minimum wage increase. During the session, Carlos Salazar Lomelín assumed the presidency of the CCE.

Alto Nivel: AMLO hace un “trato” con los empresarios para que economía crezca 4%

2. House of Representatives approves creation of National Guard, now it must be approved by state legislatures

With the unanimous approval of the Mexican House of Representatives, the constitutional reform to give life to the National Guard was approved yesterday with 463 votes in favor.

Given that the measure involves a constitutional amendment, it must be approved by at least 17 of Mexico’s 32 state legislatures before it can legally commence.

Excélsior: Diputados avalan dictamen de la Guardia Nacional

3Mexico’s Central Bank lowers 2019 growth forecasts

According to the Mexican Central Bank’s Q4 report, the country’s growth estimate was lowered to a range between 1.1 and 2.1%, averaging out at 1.6%.

Central Bank President Alejandro Díaz de León cited, “Fuel distribution problems; rail blockades; labor conflicts, particularly in Matamoros and in the north of the country; lower oil production, as well as the persistent and more marked dampening in investment,” as reasons for the lower forecast.

El Financiero: Banxico reduce a 1.6% estimado de crecimiento del país en 2019

4. International Air Transport Association criticizes airport operations plan of the Mexican government

During “Aviation Summit Mexico,” International Air Transport Association (IATA) Director Alexandre de Juniac, remarked that the three alternatives proposed by the federal government, following the cancellation of Mexico City’s new international airport, are not the best. The conference was also attended by Communications and Transportation Secretary Javier Jiménez Espriú. 

Juniac said that the operation of the three airports creates a major challenge for airlines. Additionally, there will be a medium-term impact on the Mexican economy due to the cancellation of the project. The IATA offered their assistance to help the government make the best decision to boost the airline industry and increase the flow of tourists to Mexico.

El Financiero: IATA critica frente a Jiménez Espriú alternativa del Gobierno para el NAIM

5. President López Obrador reports that 59.5% voted in favor of the thermoelectric plant in Morelos

The President of Mexico reported that 59.5% of voters in the states of Morelos, Puebla and Tlaxcala voted in favor of starting up thermal power station in Huexca, Morelos. 40.15% opposed the measure. In total 55,715 people went to the polls.

The President explained that this project will give energy to the entire state of Morelos and that if the project were to be cancelled, energy would have to be purchased at higher prices.

El Universal: El 59.5% votó a favor de la termoeléctrica en Morelos: AMLO

1. Brazilian economy grew 1.1% in 2018

According to the Brazilian Institute of Geography and Statistics, the country’s GDP grew 1.1% in 2018, equalling 2017’s growth figures. Most analysts were not surprised, having forecasted a low growth rate. Analysts revised their year-end growth projections considering the poor state of the global economy, the uncertainty surrounding 2018’s presidential race, as well as a trucker’s strike that brought transportation in the country to a momentary halt. On a more positive note, the service sector grew 1.2% as a consequence of a 1.9% hike in domestic consumption. Other sectors did not yield positive figures – agriculture, for example grew by a disappointing 0.1%.

Valor Econômico: Economia brasileira cresce 1,1% em 2018
Folha de S.Paulo: Consumo interno puxa PIB, mas setor externo prejudica resultado
G1: PIB do Brasil cresce 1,1% em 2018 e ainda está no patamar de 2012

2. Unemployment rate in Brazil reaches 12%

Brazil’s unemployment rate grew to 12%, according to a report by the Brazilian Institute of Geography and Statistics. The figure amounts to nearly 12.7 million Brazilians who found themselves out of work between November 2018, and January 2019. When compared to the same period last year, unemployment increased 0.2%. Economists attribute the increase to temporary job vacancies created in the retail and service sectors during the holiday season. An increase in recruitment to deal with year-end crowds leads to more layoffs at the beginning of the following year. The unemployment figures will likely cause an uproar among opposition leaders, who have vocally disapproved Bolsonaro’s economic proposals. The subpar figures will also fuel criticism of Bolsonaro’s planned retirement and pension reform, in addition to a labor reform passed in 2017.

Valor Econômico: Desemprego atinge 12,7 milhões de brasileiros, aponta IBGE
G1: Desemprego sobe para 12% em janeiro e atinge 12,7 milhões, diz IBGE

3. First government approval polls released – 57% approval for Bolsonaro

The National Transport Confederation released a poll showing Jair Bolsonaro’s approval rating at a comfortable 57%, with 28% disapproval. When questioned about the administration as a whole, 39.8% of respondents replied positively and 19% negatively. An additional 29% regarded its performance as “average.” The poll also polled Brazilians on various legislative measures. Opinions on retirement reform – one of the Bolsonaro administration’s priorities – split fairly evenly, with 45.6% opposed and 43.4% in favor. Legislation easing gun control measures was opposed by 52.6% of Brazilians. The most popular government proposal proved to be Justice and Public Security Minister Sérgio Moro’s anti-crime package, which received positive feedback from 62% of those polled.

Estado de S. Paulo: Bolsonaro tem aprovação de 57,5% dos brasileiros, diz CNT
Folha de S. Paulo: Bolsonaro tem 39% de ótimo e bom e 19% de ruim e péssimo, aponta pesquisa

4. Bolsonaro welcomes Venezuela’s self-proclaimed President

President Jair Bolsonaro welcomed Venezuela’s self-proclaimed interim president, Juan Guaidó, to Brasília on Thursday. The meeting took place amid an intensifying crisis in Venezuela that has led to armed confrontations at both the Brazilian and Colombian borders. Bolsonaro promised Juan Guaidó unrestricted support for the “Venezuelan people’s freedom.” Guaidó also met with diplomatic emissaries from the European Union and the United States. International political opinion is split between the recognition of Guaidó’s interim government and Nicolás Maduro’s regime. The UN Security Council rejected a U.S. proposal for a new electoral process, as well as a Russian proposal favoring non-interference in Venezuela’s internal politics. Guaidó will now head to Paraguay, where he will meet with President Mario Abdo.

Folha de S.Paulo: Venezuela vive dilema entre ditadura e democracia, afirma Guaidó em Brasília
VEJA: Juan Guaidó e Bolsonaro se reúnem em Brasília

5. Government forecasts retirement reform approval by June, but faces challenges

During an event with investors in São Paulo, Chief of Staff Onyx Lorenzoni stated the administration’s retirement reform will be approved by June. Despite his optimism, the administration will have to face some challenges. (1) Tensions between the administration and legislators. The situation boils down to Bolsonaro opting to negotiate with party groups instead of with party leaders who can no longer influence government nominations. Nominations were used as a negotiation tool with previous administrations. (2) Pressure exerted by corporations and public officials. Their influence in Brasília will show, as many view the reform as detrimental to their interests. (3) Pressure from the left. Opposition parties are planning strikes and demonstrations through social movements and labor unions.

Folha de S. Paulo: Reforma da Previdência pode ser aprovada em junho, diz Onyx
UOL: Entenda desafios políticos de Bolsonaro para aprovação da nova Previdência

1. Macri inaugurated the 137th period of ordinary sessions of the Congress

President Mauricio Macri inaugurated the 137th period of Ordinary Sessions in the Congress of the Nation in the context of an election year. The president began his speech comparing his management with the situation of the country in 2015. “Today we can say that Argentina is better off” he said. Then, he highlighted economic improvements and expressed about public works, industry, education, the international panorama, tourism and the fight against corruption and drug trafficking.

La Nación: Macri inauguró las sesiones en el Congreso con su discurso más enfático y aseguró que la Argentina está mejor que en 2015

2. Economy drops 7% in December

The Argentine statistical agency reported a 7% drop in December’s economic activity compared to the same month in 2017, further proof of the economic crisis in Argentina that led to a 2.6% slide in economic production in all of 2018. Sources from the Ministry of the Treasury are confident that this will be its lowest point. Additionally, the Ministry of Production and Labor reported a loss of 191,300 jobs last year, and a 10% fall in real wages. The private sector recorded a loss of 97,300 jobs in 2018.

El Cronista: La economía cayó 7% en diciembre y acumuló una baja de 2,6% en 2018

3. Supreme Court sets judicial agenda with potential for economic consequences

The Argentine Supreme Court announced that it will issue sentences in twelve politically-sensitive cases with the potential to produce economic consequences. The sentences include decisions on retirement assets, the reelection of the governor of La Rioja and rates charged by municipalities regarding private industry. On the other hand, a decision on whether families of public officials can be questioned on money laundering cases was put on hold.

La Nación: La Corte Suprema fijó un temario de fallos con fuerte impacto económico

4. Government promises USD $100 billion in credits for SMEs

During a visit to Santa Fe, President Mauricio Macri and Minister of Labor and Production Dante Sica announced a financing plan for small and medium-sized enterprises (SME), with the objective of helping them overcome high interest rates, a fall in consumption and other consequences of the Argentine economic crisis. The Government announced a USD $100 billion line of credit to help free up funds for SMEs with rates between 25 and 29% at public and private banks.

Perfil: Macri y Sica prometieron 100.000 millones para créditos a Pymes

5. Macri opens discussions on rural withholding taxes

Mauricio Macri met with the agricultural sector to discuss tax policy on soy and its byproducts, along with biodiesel and new markets for flour. Macri reiterated his discomfort with the export duties but insisted that the country’s economic situation does not allow for their removal – stating that they are necessary to balance books. For this reason, exporters and producers must prepare a proposal to the government to enact a policy change. The meeting will occur after mid-March and will be crucial to analyze the potential cost this sort of change would incur.

El Cronista: Macri abrió la puerta para discutir retenciones a exportaciones del campo