Presidents of Argentina and Chile both attended the One Belt One Road (OBOR) Summit in Beijing in May, adding on bilateral visits to sign agreements. Chinese President Xi Jinping’s meetings in 2016 with Bachelet and Macri launched the China-Chile Comprehensive Strategic Partnership and agreement on two nuclear plants to generate over 1200 MW of electricity in Argentina. China is the largest trading partner of Brazil, Peru and Chile, and the second largest for still more LAC countries.
Pre-feasibility studies are being undertaken for a 19,000 km trans pacific, fiber optic, submarine, cable between China and Chile, a first between Asia and South America and one of the longest in the world. Chile and Bolivia were admitted as members of the Asian Infrastructure Investment Bank.
The IMF forecasts Latin American growth to expand by 1.1 percent in 2017 and 2 percent in 2018, following stagnation in 2015 and 1 percent contraction in 2016. Over the medium term, growth is expected to remain subdued at 2.6 percent. Some of India’s principal economic partners are struggling: Brazil will grow at only 0.2 percent; Chile and Mexico at 1.7 percent; Peru, Colombia and Argentina will do a little better. The good news is that Brazil is expected to grow at over 1 percent in 2018, with lower inflation and interest rates, and economic reforms on the anvil. Much of this will depend on the outcome of the political processes referred to above.
July 7, 2017