Latin American investment needs to outstrip economic growth in coming years -BlackRock
05/12/2023 22:26
SAO PAULO, Dec 5 (Reuters) - Latin America's social and
investment needs will outstrip its annual economic growth in
coming years, the region's head strategist for BlackRock
investment firm said on Tuesday, saying the region's economy
could grow some 3% by 2026.
Axel Christensen, head regional strategist at the world's
largest asset manager, said this estimate came from forecasts
from multilateral organizations and investment banks and did not
represent BlackRock's official guidance for the region.
"This is not enough growth to address the social demands and
needs for investments," Christensen told journalists in Sao
Paulo. "We are close to concluding that long-term growth for the
region is lower than what we would expect."
A key factor would be how regional economies react when
interest rates reach a "neither restrictive or stimulative"
level, he added.
Brazil, Latin America's largest economy, narrowly avoided an
economic contraction in the third quarter according to official
data on Tuesday, growing 0.1% from the previous quarter and up
2% from the same period a year earlier.
Brazil's central bank began cutting rates in August. Its
benchmark interest rate is now down 150 basis points at 12.25%.
Mexico, the region's No. 2 economy, saw its quarterly GDP
grow 1.1% from the previous quarter and 3.3% from a year
earlier, while rates have kept steady since March at 11.25%
following a close to two-year tightening cycle.
Christensen nevertheless said that BlackRock had seen a
series of investment opportunities in Latin America, notably in
financial services and technology, while trade partnerships
including talks between the European Union and Mercosur economic
blocs were also encouraging.
(Reporting by Patricia Vilas Boas; Writing and additional
reporting by Andre Romani; Editing by Josie Kao)