Latin America is a region of the globe where pessimism springs eternal when it comes time for annual economic forecasts.
From a BAÂ perspective, it’s a little like making a reservation withÂ Aerolineas, the state-owned airline: You know you will eventually reach your destination, but you’re just not exactly sure how or when.
Similarly, economists and regional analysts know Latin American countries will make it to the end of the year, but bearish forecasts are the norm given theÂ abundancia of unknown macro and political variables. The Wall Street Journal’s Nicholas Casey says 2009 was no exception, “Investors began 2009 bracing for more drops in Latin American stocks as global markets plummeted in the worst economic crisis in generations.”
Now fast forward to December 31, 2009, and see how bracing and fence-sitting worked out for regional investors: Argentina’s Merval Index surged 115%, Brazil’s Bovespa rose 83% and Mexico’s IPC rallied a respectable 43%. With such “heady gains,” we should hit our knees praying for another round of dire predictions; yet, Casey warns us, “Forecasts are now for an optimistic 4% economic growth for Latin America given its performance in the past year.”
For now, we’ll just have to sit back, relax and see if 2010 is ultimately defined more by unexpected turbulence or friendly skies.Â Bienvenidos A Bordo.
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