Different kettles of fish
Although neither is in good odour with the markets, Brazil and Mexico are on different growth trajectories
ON THE face of it, the pundits appear to have got their projections for Latin America’s two biggest economies upside down this year. Mexico, which started with the most promise, unexpectedly suffered a 0.7% slump in the second quarter compared with the first three months, according to data released on August 20th, due to a slump in construction, mining and exports. Brazil, which has been the subject of much hand-wringing since China’s demand for commodities collapsed, is expected to show decent growth when second-quarter figures are published on August 30th.
Adding to the bafflement, manufacturing, which has long been considered weak in Brazil, has been doing better there than in Mexico, where it is usually the most efficient part of the economy thanks to close integration with the United States. Neil Shearing of London-based Capital Economics says industrial output rose by 1.1% in Brazil in the second quarter over the previous three months. In Mexico, adding in construction, it sank by 1.1%.
This article appeared in the The Americas section of the print edition under the headline "Different kettles of fish"
The Americas August 24th 2013
From the August 24th 2013 edition
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