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Thursday, November 06, 2003

Of Pesos and Mambos

Here's another blog for you to check out: it's an LA group blog called Southern Exposure, and guess who's involved? Today's news, from Argentina and from Brazil.

Telefónica de España has annouced that it will invest U$D 701.3m (about 2b Argentine pesos) to extend and upgrade its infrastructure in Argentina, tempted by prospects of 7% growth for the next year, while Brazil has renewed and expiring $14bn accord with the IMF. These are somewhat significant news, as there have been some strong words crossed between privatized utilities and the government in Argentina, and serious criticism from supporters of Brazil's government regarding dealings with the IMF.

And fishing co-blogger Stephen up from the depths of the comments section:

The Brazil renewal of the IMF accord is indeed significant news. Sort of like "hell freezing over" as far as Lula in opposition was concerned. But he learned it's a bad idea to spook the horses before you have to ride them. Still, the government has said that it would like to exit the IMF arrangement and they consider this an interim arrangement. Lets them save some face, provided Brazil continues to progress and maintains its current account surplus sufficient to service its debt. An article in yesterday's Globo points to intention to invest in Brazil in the year ahead. Overall, investment intentions have increased from US$42bn in 2002 to US$67.9bn in 2003, an increase of 61.5% which is seen as a "reheating" of the economy. The source of the data is the Fundação Getúlio Vargas.

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