Various agendas across Latin America look busy with social security reform in Brazil, elections in Argentina and more happening across Colombia, Mexico and Chile. We highlight a few key events and their relevance not only for the region, but for global investors.
Brazil: Social Reform Taking Center Stage
The end of the year is approaching, and several upcoming events and deadlines will be driving Brazil’s agenda. Social security reform, the main reform in the spotlight, has been delayed and may now be diluted. But it is not dead, Marcelo Carvalho, head of latin America Research with BNP Paribas tells clients. Regardless, the Brazilian government will need to “move fast” to get it approved before the end of the year. On the growth side, the privatizations and concessions agenda is under way, with oil field auctions scheduled for September and October.
On the political front, even though the 2018 election is more than a year away, the first talks from parties and possible candidates will likely occur before 2017 comes to an end. Potential candidates will discuss issues they think are most important for the country [Brazil]. Market participants should respond positively towards candidates who remain in favor of the current reform agenda.
Argentina: Midterm Elections
Country-wide mid-term elections are scheduled to take place on October 22. Based on the performance in the August mandatory primaries (PASO), the ruling coalition Cambiemos, is now expected to increase its share of seats in Congress. The Peronist party, in contrast, has many more seats at risk and if its performance is similar to that in August, it will see its overall participation decline. The key focus will be whether Cambiemos manages to turn around the result of the BA province senator election, won by former President Cristina Kirchner by a very slim 0.2pp margin, which could happen as macroeconomic performance is apt to continue to improve through the election.
Mexico: NAFTA Renegotiation Ongoing, Election On Horizon
As the US, Canada and Mexico continue to renegotiate NAFTA, the third round of talks on the trade pact are now scheduled for September 23, following two fairly quiet rounds. With the most controversial issues still to be tackled, the next steps will be important, market and trade analysts say. In Congress, the Budgetary Law will need to be approved by end of October while more details on the source of the spending cuts promised are still missing. A first look of the draft points to a conservative budget again. With Congress’s attention being diverted by the 2018 election, a key task in the coming months will be to see if the two main, centre-right parties (PAN and PRI) can overcome their internal divisions and who their candidate(s) will be. The recent Congressional shutdown suggests a fiery run.
Photo Credit: Associated Press