In the first half of October inflation rose above expectations in Mexico, but it is expected to close the year at around 3.3% y/y.
Credit in Brazil grew 19.6% year-on-year in September. This is within the range of 19-21% growth since August 2010. In Peru, the year-on-year rise of 20.1% was led by growth in consumer loans (24%).
The government has issued a decree making it mandatory to negotiate on the local market all the foreign currency revenues from exports of oil, derivatives, gas and mining, which until now had benefited from an exceptional status for their export revenues. In addition, the government announced that insurance companies must repatriate funds from investments they have abroad. The aim of these measures is to reverse the flow of reserves out of the country (USD 1.5 billion in October). In all, this week the Central Bank has accumulated foreign-currency sales of more than USD 500 million.
The trade balance in Argentina posted a surprising rise to USD 1,064 million in September as a result of weaker imports. In Brazil, the trade balance fell to USD 3,074 million in the same month. However, the current account deficit was below expectations as the deficit in the income and services accounts was down due to the significant loss in value of the Brazilian real.
In Argentina, industrial production grew 5.1% y/y in September (0.6% m/m in the seasonally adjusted series). In Chile, the increase in the manufacturing industry was 5.2% y/y, which surprised in a positive way although month to month growth was zero. In both countries dynamic stayed strong in retail sales, reaching 34.4% nominal y/y in Argentina and 9.6% real y/y in Chile.
Cristina Fernández re-elected with overwhelming majority
The current President obtained an expected and overwhelming victory in the presidential elections, with 54% of the votes. The governing party also recovered control of Congress, with a majority in each of the houses, and won 8 of the 9 provincial governorships up for election.