Economic activity in Latin America has been slowing down, but there still are pockets of opportunity. One example is the F&A sector in Brazil, which has performed much better than the overall economy.
The past year has been tumultuous for Latin American politics, characterised by a shift to the right in election results and away from populism in policy, and numerous corruption scandals. Current risk levels are likely to linger in the coming year.
Economic activity in Latin America is expected to pick up in 2017, though the improvement is modest. Few countries enjoy the room to use monetary or fiscal stimulus to give their economies a hand.
We expect that UK’s vote to leave the EU will negatively affect economic growth in the eurozone. We believe that the impact in 2016 is rather small, but we lower our growth forecast for 2017 for both the eurozone and the Netherlands by ¼%-point.
Economic Comment Dutch version
Eurostat released a preliminary flash GDP estimate this morning, coming in at 0.3% quarterly growth in the second quarter of 2016. This figure was in line with market expectations.
Economic Report Dutch version
European growth is expected to remain subdued in the coming years, due to fading tailwind gains and structural weakness. Negative risk to the outlook have risen; the refugee crisis and a Brexit being the most prominent ones.
Italian banking shares dropped 30% in the first months of 2016. Policy makers have recently taken measures to revive the banking sector, but also to improve governability of the country. Measures will be partly effective in reviving the economy.