Marktbericht Lateinamerika Feb08

Volatility increased in Latin American stock markets but did not completely derail the momentum that has built over the past few years, allowing local economies to continue to expand.

Executive Summary

• As the new year began, concerns about the potential effects of a weaker global economy took center stage in Latin America even as strong consumption continued to support economic growth throughout the region.
  
• Local governments are devoting more attention and resources to housing and infrastructure, sectors that have witnessed increasing investment recently. For instance in Brazil, where foreign direct investment reached a record high in 2007, capital has been flowing into improvements in the country’s infrastructure that should enable business to flourish, from roads to office space.
  
• While housing activity slowed in developed economies, growth in Latin America remains steady. In Mexico, the region’s most mature housing market, mortgage providers are still far from keeping up with potential demand — and even farther away from even considering any subprime-type lending.
  
• Economic growth, which was positive for 2007 despite some slowdown toward the end of the year, is resulting in increased demand for commercial real estate. Retail and office development activity is on the rise across the region, fueled in part by foreign equity and debt.