Private Banks reject the use of electronic currency in Ecuador

Ecuador’s Association of Private Banks (Asobanca) presented a constitutional action to protect themselves against the resolution imposed by the Market Control Superintendence (SPM), with regards to electronic currency (El Universo, 20 December 2016). On 14 December 2016, the Market Control Superintendence (SPM) issued a resolution that within 30 days, fourteen private banks cannot reject the use electronic currency, and must be willing to open bank accounts with this new currency, if a customer desires. Through a press release, Asobanca explained this precautionary measure is to preserve constitutional rights to freedom of speech, due process, and judiciary rights (El Comercio).

Uruguay exported the largest volume of beef within the last decade in 2016

Uruguay beef exports in 2016 increased from 387,000 tons in 2015 to 440,000 tons. According to Meat Institute (INAC) President Federico Stanham, it is the largest volume produced in a decade (La Republica, 21 December 2016). INAC projected prices will close 2016 with an average price close to $3,400; a 10 percent decrease from 2015. The decrease in price is due to fifteen years of fluctuating prices. China is the primary destination for beef exports. The European Union only accounts for 12 percent of total beef volume exports (second largest market). The third largest market is NAFTA (Mexico, USA and Canada) with 23 percent (El Pais, 21 December 2016).

Honduran coffee sector seeks foreign labor for harvest

Members of the Honduran coffee sector predict a need for more than 60,000 seasonal workers for the 2016-2017 coffee harvest, which began on 1 October (Prensa Latina, 19 December 2016). Instituto Hondureño del Café (Ihcafé) President Asterio Reyes explained that last year between 35,000 – 40,000 workers from Nicaragua, Guatemala, and El Salvador came to Honduras to harvest coffee, and he expected that number to be closer to 60,000 in 2016 (La Tribuna). According to La Tribuna, the coffee sector generates up to 1 million direct and indirect jobs throughout the season. 

Brazilian economy contracts 0.48 percent in October 2016

According to data from the Brazilian Central Bank disclosed on 15 December 2016, the Brazilian economy contracted 0.48 percent in October 2016 (Valor, UOL). The drop comes after a milder contraction of 0.08 percent in September 2016. The IBC-Br, an index of economic activity that estimates Brazilian GDP growth by taxes from the agricultural, industrial, and service sectors, has registered a 4.82 percent contraction since the beginning of 2016 and a 5.09 percent contraction in the past twelve months (both ended October 2016). Finance Minister Henrique Meirelles noted on 14 December 2016 that the economic situation remains difficult, but that he is not disappointed by the pace of economic recovery. 

Petrobras confirms US$5 billion loan from China Development Bank

The state oil firm Petrobras reported on 16 December 2016 that it signed a financing agreement with the China Development Bank (CDB) for a ten year loan of US$5 billion (Valor, Globo G1). The financing is the result of a US$10 billion agreement announced on 26 February 2016 between Petrobras and CDB. Per the agreement, Petrobras will provide a total volume of 100,000 barrels of oil per day to China National United Oil Corporation, China Zhenhua Oil, and Chemchina Petrochemical over the term of the loan, in lieu of making interest and principal payments. The company also signed agreements with these three firms.


The agreement is questionable on Petrobras’ end. At an average price of US$50 per barrel of crude oil, Petrobras would effectively pay a 36.5 percent interest rate based on economic cost. However, Petrobras is the most indebted company in the world, with over US$100 billion in long-term debt as of 30 September 2016 and scaling efforts to shed non-core assets to reduce its leverage (Globo G1). As such, their credit options were limited in February 2016, and the US$10 billion agreement with CDB enabled them to raise funds in February without issuing equity, when their stock price was at its nadir (Globo G1). Shares of the firm rebounded in 2016, increasing 266 percent from a low of US$2.71 in February to US$9.91 on 20 December 2016, as the Brazilian stock market rallied in anticipation of Dilma Rousseff’s impeachment and the price of Brent crude oil rebounded from a low of around US$35 in February to the mid-US$50s in December 2016 (Google Finance).

Mexican President meets with business leaders to discuss 2030 agenda

Mexico President Enrique Peña Nieto met with the Executive Board of Global Enterprises (CEEG) on 19 December 2016 and received the Mexico Agenda 2030: Proposals for Inclusive Growth before the Fourth Industrial Revolution (El Economista). The agenda contains approaches to achieve economic growth with greater productivity and social inclusion, and CEEG President Frédéric García claimed the document laid the foundation for Mexico to become the world’s fifth largest exporter by 2030 (El Economista and SIPSE). Peña Nieto said the proposal matched his administration’s vision of improving society through the transformation of productive sectors. The meeting was moderated by Economy Secretary Ildefonso Guajardo Villarreal and addressed a variety of topics, including development of value chains, special economic zones, and research and development among others. The CEEG includes 50 multinational companies which together represent 10 percent of the Mexico’s GDP, 11 percent exports, and 40 percent of the country’s total foreign direct investment (SIPSE). 

Pemex gasoline production reaches lowest level since 1992

El Economista reported on 19 December 2016 gasoline production from Pemex has reached its lowest levels since 1992. Gasoline production reached an average of 341,023 barrels per day (bpd) from January to October 2016 (El Economista). Production of premium gasoline from January to October 2016 stood at an average of just 9,700 bpd, a 45.8 percent decrease from the same period of 2015 when the company produced 17,900 bpd (América Economía). Gas shortages across Mexico have recently caused concern and Pemex clarified the shortages were due to bad weather issues which have prevented ships from unloading supplies in Tuxpan, Veracruz. Although Mexican refineries have experienced operational issues which have led to decreased production, Pemex insisted it was not the cause of gasoline any shortages (América Economía).

Turkish Airlines inaugurates Istanbul-Havana-Caracas route

Turkish Airlines began running its new Istanbul-Havana-Caracas route on 20 December 2016. The route is set to operate three times per week, with additional flights planned for the near future (Globovisión). During the inauguration ceremony in Caracas, Venezuelan Industry and Commerce Secretary Jesús Faría noted the rapid launch of the route following an accord signed at a 10 October summit between the Venezuelan and Turkish presidents. According to Sule Oztunc, the Turkish Ambassador to Venezuela, the route is part of Turkey's plans to expand its presence in Latin America (El Nacional).

Ford suspends auto production in Venezuela until April 2017

Ford Motor Company announced on 20 December 2016 it suspended its automobile production in Venezuela and will not resume operations until April 2017. Lyle Watters, Ford's President for South America, stated the measure would adjust production to demand in the country, and added the shutdown of Ford's plant would affect 2,000 employees (La Patilla). Ford is the only auto company that still mass produces cars in Venezuela, albeit at the rate of fewer than eight vehicles per day, according to figures from the Venezuelan auto producers' association Cavenez. Panorama noted Ford produced 2,253 of the national total of 2,758 cars between January 2016 and November 2016.

El Salvador's first photovolcaic energy plant to open in April 2017

A solar energy project worth US$151 million in investment is due to begin operations in April 2017 (El Diario de Hoy, 14 December 2016). The project, Providencia Solar 1, includes the Antares plant, awarded through a public bidding process, and the Spica plant, negotiated privately with energy distribution company DelSur (La Prensa Gráfica). French company Neoen developed and financed US$33 million of the project, and other investors included the Inter-American Development Bank with US$88 million and the Agence Française de Développement (AFD) subsidiary Proparco with US$30 million (El Diario de Hoy). The complex will produce 101 megawatts of energy, which can power 200,000 homes. The energy produced by Antares will be sold to DelSur, Edesal, B&D and four of AES El Salvador's distributors, while Sica will sell exclusively to DelSur (El Diario de Hoy). According to Neoen, Providencia Solar 1 will be the largest solar plant in Central America and a spokesperson cited El Salvador as a growing market for the development and construction of solar panel systems.

Uber arrives in Guatemala

After announcing plans in August 2016 to roll out operations in Guatemala, Uber began offering services in specific cities on 12 December 2016 (El Diario de Hoy). According to El Periodico, the company has at least 1,000 Guatemalan drivers in its fleet who have had to pass a series of checks, like submitting prior prison records, and registering with the tax administration. A spokesperson for Uber added that the company sees Latin America as the region for the most growth in 2017 (El Periodico).

Private-Public sector alliance to drive real estate in Ecuador

Through a public-private sector alliance, around US$500 million will be invested in Ecuador's real estate sector (El Universo, 16 December 2016). During 2017,  three public tender processes will be held for the construction of housing units. Housing Public Company (EPV) Manager Monserrat Benedito estimated close to US$450 million will come from the private sector, while US$50 will be from the public sector in the form of land. The goal is to build a total of 12,000 homes in Guayaquil, Quito, Ambato, Ibarra, Quevedo, Santo Domingo, Santa Elena, and Manabi.

Mexico-U.S. Energy Business Council holds its first meeting

Mexico and the U.S. held their first meeting of their bilateral Energy Business Council on 16 December 2016 (América Economía). The objectives of the bilateral council include examining ways to strengthen economic and trade links within the energy sector, as well as increasing bilateral development and generating non-binding recommendations to the governments (Opportimes, and América Economía). Sources from the office of Mexican Energy Secretariat (SENER) reported council members agreed on a work plan for future council activities. SENER also guaranteed all sectors of the energy sector are represented on the council with twenty company and association leaders and representatives split equally from Mexico and the U.S. (Opportimes and América Economía).

Inflation in Argentina reached 1.9 percent in November

According to the measurements by private consultancies, inflation averaged 1.9 percent for November 2016. Experts estimate that by the end of 2016, inflation could total between 39.6 and 41 percent, a figure significantly greater than in 2015 and 2014 (Entorno Inteligente, 9 December 2016). Experts reported inflation has had a significant impact in the food and beverage industry and in the transportation and communication industry (Clarín, 10 December 2016).  

Paraguay attempting to join the OECD's Development Group

Several news outlets reported on 9 December 2016 that Paraguay presented its candidature to join the OECD's Development Group. This group is comprised of 51 members and works as a platform for the sharing of best practices related to economic development. OECD member states share their experiences in areas such as sustainable market growth, and democratic governance. Planning Minister José Molinas explained that being able to learn from OECD's best practices will help Paraguay attain the economic and political goals set forth in its 2030 National Development Plan (La Nación). Molinas explained Paraguay's candidature has passed the first stage, which involved presentations from President Cartes and Treasury Minister Santiago Peña. The OECD's Council will meet in February 2017, and if no objections are raised it would instruct the institution's Secretary General to process Paraguay's membership (Entorno Inteligente).

Foreign Direct Investment increases 10 percent in Honduras

According to a Banco Central de Honduras (BCH) report on FDI flows, Foreign Direct Investment (FDI) in Honduras increased 10 percent during the third trimester of 2016 compared to the third trimester of 2015 (Radio HRN, 11 December 2016). FDI reached US$924.7 million with 69.4 percent as reinvestment of profits, 17.8 percent as other capital and 12.8 percent as account transfers between companies (La Tribuna). The most attractive sectors for FDI included services, followed by manufacturing, transportation, storage and telecommunications, goods for processing and trade. Latin America represented the largest source of investment with US$341.9 million, followed by North America with US$315.2 million and Europe with US$177.3 million (La Tribuna).

Colombian Central Bank appoints new general manager

Colombia's Central Bank (Banco de la República) announced on 12 December 2016 that Juan José Echavarría Soto will take over as General Manager on 4 January 2017. Mr Echavarría is an engineer by trade who studied a Masters in Economics at Boston University and obtained his PhD in Economics at Oxford University. He brings a varied public and private sector experience, having held senior levels in the executive such as Vice Minister of Trade, or board member at the Central Bank (Noticias RCN). The main challenges facing the new General Manager will be controlling inflation - currently estimated at 5.5 percent for 2016 - while responding to calls from government officials and private sector to reduce the country's interest rate, which currently stands at 7.75 percent. Additionally, the country faces a slowing GDP growth and strong currency devaluation, coupled with lower than expected fiscal revenues because of the relatively low price of its petrol exports (El Nuevo Siglo). 

Experts reduce forecasts for 2016 GDP growth in Chile

On 12 December 2016, Chile's Central Bank released the results of its monthly survey on Economic Expectations. The survey respondents were 57 academics, consultants, and advisors to financial institutions. Forecasts were more pessimistic than in previous months, reducing the GDP growth expectations for 2016 to 1.6 percent from a previous level of 1.7 percent. Expectations for 2017 and 2018 were left untouched, remaining at 2 and 2.8 percent respectively (La Nación). The experts consulted also expected a 0 percent inflation rate for December, and a 0.2 percent increase in January 2017. Within this context, and in light of the poor economic activity data released for the month of October 2016, the survey results forecasted that the Central Bank's interest rate would remain at 3.5 percent for the remainder of 2016, with expectations of a 0.5 percent reduction during 2017 (La Vanguardia).

IADB to provide financing for the Chile - Argentina tunnel

The IADB announced on 12 December 2016 that it will provide funding in the form of two loans worth a combined US$40 million for the construction of the Agua Negra Bridge that will link San Juan province in Argentina with Coquimbo in Chile. The announcement will enable the Argentine and Chilean governments to launch the tendering process for the tunnel's construction. Total estimated construction costs are projected at US$1.5 billion, with an estimated construction time of 8.5 years. (BioBio). Chilean government officials argued the tunnel constitutes a vital step forward in Chilean-Argentine economic integration, and will also contribute to deepening integration between Mercosur countries. The tunnel could eventually become part of a transport link that will connect the Atlantic with the Pacific, from Porto Alegre in Brazil to Coquimbo in Chile. Chilean Minister of Public Works, Alberto Undurraga, expects to conduct a tendering procedure to select a contractor in the first half of 2017 for construction work to begin in early 2018 (Diario Financiero).

Senior Mexican and Chinese officials meet

Mexican Foreign Secretary Claudia Ruiz Massieu met with Chinese State Councilor Yang Jiechi in Mexico City on 12 December 2016 and pledged to strengthen ties between the countries in various aspects (Aristegui). Yang Jiechi also met privately with President Enrique Peña Nieto to he reviewed the agenda of issues regarding the bilateral relationship (Aristegui and Excelsior). The encounter was a follow up from a meeting held in September 2016 between Peña Nieto and Chinese leader Xi Jinping which formalized the creation of the China-Mexico investment fund featuring over US$50 million in various projects. Official figures showed trade between the two nations reached US$74.9 billion at the end of 2015 (Excelsior).