Marktbericht Lateinamerika Jan09

Economic activity in Latin America has slowed down noticeably.

Executive Summary

• The economies in Latin America are decelerating as industrial production contracts and consumer confidence reaches historical lows. Industrial and commodity export volume has declined as global demand cooled off.
  
• The effects of the global recession are not expected to be as intense in Latin America as in other parts of the world. Most countries in the region should post slight growth rates in 2009 and 2010. Meanwhile, the downturn will serve to ease inflation in the region.
  
• Governments across the region are implementing stimulus plans that include lowering interest rates, direct capital injections into companies, and investments in infrastructure that are significantly larger than in the past. Countries that have been exercising fiscal responsibility will have better ability to withstand the downturn than those that have been less disciplined.
  
• Demand for commercial real estate in the region came to an abrupt halt, although going forward certain sectors and locations will be more affected than others. Strategies that might outperform include those that aim to take advantage of the capital infusion into infrastructure.
  
• The volume of property transactions slowed in the fourth quarter, making it is difficult to gauge property values. Prices will be impacted by demand for space, currency movements, the conservative financing environment, and heightened risk aversion. As funding sources disappear, real estate investors should find attractive opportunities in which to place capital.