Ecuador´s military opened roads and bridges that protesters had taken over in the northeastern provinces of Orellana and Sucumbios as part of last week´s strike that crippled oil production. State-run Petroecuador says 30 of 400 wells are back online, but claims to have lost 740,000 barrels of crude due to the strike. Private oil production, which normally is 340,000 b/d, also was cut by more than half as protesters sabotaged electricity lines and control valves, and dynamited a pipeline. Strikers backed by local authorities are calling for the government to back up promises to use oil revenue for social projects.
Category: Regions
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Mexico: Growth Forecasts Cut
JPMorgan Chase, Credit Suisse First Boston, Santander Central Hispano and ING Groep all cut their forecasts for Mexican growth this year after a government report showed the economy expanded less than expected in the second quarter. JPMorgan reduced its growth forecast to 2.4 percent, Credit Suisse First Boston cut its forecast to 3 percent and Santander lowered its estimate to 3.2 percent. ING cut its estimate to 2.8 percent. The Mexican economy shrank a seasonally adjusted 0.4 percent in the second quarterr.
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Mexico: Growth Quickens
Mexican economic growth quickened to 3.1 percent year-on-year in the second quarter, led by a jump in investment as companies build plants to meet rising demand in the domestic market and in the US. The Mexican economy grew 2.4 percent in the first quarter. Mexico´s central bank has left its benchmark interest rate unchanged since March as inflation has moved closer to the bank´s target of 2 to 4 percent.
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Kuczynski Named Prime Minister
Peru’s Finance Minister Pedro-Pablo Kuczynski, a former managing director at Credit Suisse First Boston and an ex-World Bank official, was named the nation’s new prime minister to head a cabinet that took office Tuesday. Kuczynski’s deputy, Fernando Zavala, was appointed finance minister. Kuczynski returned to the finance minister’s post in 2004 and has overseen the longest unbroken stretch of economic growth in Peru’s history. President Alejandro Toledo´s mandate ends next July.
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Mexico: Cisco Sees Growth
US communications equipment maker Cisco Systems expects sales in Mexico to increase 30 percent this year, according to the company´s vice president for Latin America, Carlos Carnevali. Cisco, whose main clients in Mexico are banks, retail chains and manufacturing firms, reported sales in the country up 20 percent in 2004.
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US-Mexico Trade Deficit Grows
The US trade deficit with Mexico widened to $4.8 billion in June, up from $4.5 billion in May, largely as a result of rising oil prices. Mexican exports to the US stood at $14.9 in June, a record-high high, while US exports to Mexico stood at $10.1 billion. The US trade deficit with Mexico stood at $24.5 billion in the six months through June.
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America Movil Buys TIM Peru
Mobile telecommunications giant America Movil, owned by Mexican tycoon Carlos Slim, bought Peruvian mobile telecom operator TIM Peru for $505 million. The deal comes on the heels of America Movil´s purchase of Chilean mobile phone operator Smartcom earlier this month. American Movil bought BellSouth´s mobile assets in Latin America last year for $5.85 billion.
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CORRECTION:
In Friday’s LatinFinance Daily Briefing we incorrectly reported that Mexican cellphone operator América Móvil had bought BellSouth´s mobile assets in Latin America for $5.85 billion last year. In fact, BellSouth sold to Spain’s Telefónica. We apologize for the error.
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Fox May Sign Sugar Law
Mexican President Vicente Fox may concede to sugar farmers’ demands and sign legislation that would help keep prices of the commodity from falling, Agriculture Minister Javier Usabiaga said. Thousands of sugar growers from 15 states began blocking the entrance to the agriculture ministry in Mexico City two days ago. The legislation, which Fox had previously promised to veto, would bring back a formula for setting prices mills pay for sugar.
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Ecuador Plans Bond Sale
Ecuador will sell bonds worth $300 million to Venezuela in September, according to the country´s Economy Minister Magdalena Barreiro. Barreiro, who took office this week, says Ecuador is seeking guarantees on the debt by the Andean Development Corporation (CAF). Venezuela, continuing President Hugo Chavez´s policy of building economic ties with other South American countries, has made a proposal to process Ecuadorian crude oil in Venezuelan refineries.