Friday, November 22, 2013

As goes Venezuela

[Former Finance Minister Rolf] Lüders attributes this decrease to the parallel plummet in investment compared to in previous quarters. Figures in this area have only increased 3.2 percent from last year, marking the worst results since the end of 2009 when statistics dropped to -5.7 percent, which may be directly related to Chile’s current presidential elections.
“Investors invest on the basis of expectations, and expectations are going to be increasing in the run up to elections,” Lüders said.
And the expectation is that a socialist-communist/Allendean is going to be the next President.
Michael Henderson, emerging markets economist at Capital Economics, told Reuters the expected winner of December’s run-off election between Evelyn Matthei and Michelle Bachelet would take the helm of [a] country less equipped to deal with the effects of international financial headwinds.
“With investment weakening and the current account deficit uncomfortably wide, Michelle Bachelet [should she become president] is set to inherit an economy which has become increasingly vulnerable to external shocks,” Henderson said.
And it is self-inflicted, as Chile seems to be on the verge of abandoning the economic policies that have made it the envy of all other Latin American countries.

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