Forex Flash: Growth in Latin American has accelerated in Q4 - Capital Economics

FXstreet.com (San Francisco) - With the majority of Q3 data now released, it appears that Latin America expanded by 2.2% y/y in Q3, according to a recent report published by the Capital Economics Team. It means a slightly slowdown from 2.3% YoY increase in the Q2, but below 10-year average of 3.5% YoY.

The Capital Economics' tracker suggests "that growth in Latin American has accelerated in Q4, with a recovery in Brazil offsetting a slowdown in Mexico." However, according to the research institute, the Brazilian economy "is reaching the limits of consumer-led growth, while the Mexican economy looks set to rebound next year."

Accordingly, "the relative prospects for the region’s two largest economies look set to diverge once again in 2013." While the Capital Economics expects Mexico to "outperform over the next couple of years." The Brazilian economy doesn't offer too many good clues.

"Recent efforts to kick-start the Brazilian economy have simply rekindled the old consumer-led growth model. But Brazil is reaching the limits of consumer-led growth and we therefore expect that the economy will expand at a relatively lacklustre pace over the coming years."

In this line and as FXstreet.com noted in November, Colombia is expected to grow 3.5% in 2013 according to another Capital Economics report. Colombia's GDP will advance by 4.0% in 2012, 3.5% in 2013 and 4.5% in 2014, according to Capital Economics. Meanwhile, inflation would remain controlled, 3.3% in 2012, 3.5% in 2013 and 3.0% in 2015.

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