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.
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.
3. Mexico’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.
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.
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.
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:Folha de S.Paulo: G1:
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.
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:Folha de S. Paulo:
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.
5. Government forecasts retirement reform approval by June, but faces challenges
Folha de S. Paulo:UOL:
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.
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.
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.
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.
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.