- Chile: We project GDP expansion of 5.5% y/y in May
- Colombia: José Antonio Ocampo named next Finance Minister
CHILE: WE PROJECT GDP EXPANSION OF 5.5% Y/Y IN MAY
On Thursday, June 30, the statistical agency (INE) released manufacturing production data for May along with mining output and retail sales for the same period. All three indicators are key inputs to estimate monthly GDP, which the BCCh will release July 1. According to INE, manufacturing production grew 3.5% y/y, which was below the market consensus (4.5%) and Scotiabank’s expectations (5.0%). For its part, retail sales fell 5.6% y/y, worse than our forecast of a null increase y/y, owing to the dismal performance of electronic goods, which fell 26% y/y. Compared to the previous month, retail sales expanded 0.8%, which is consistent with a slight m/m expansion of commerce GDP. Mining production increased 4.8% m/m in seasonally adjusted terms but was down on a year-over-year basis (-0.3% y/y). This outcome was better than our expectations and consistent with a similar magnitude m/m increase in mining GDP, driven by an excellent performance of the lithium industry.
Based on these indicators, we forecast a monthly GDP expansion of 5.5% for May (+0.4% m/m), mainly driven by services, while mining GDP continues to fall y/y.
COLOMBIA: JOSÉ ANTONIO OCAMPO NAMED NEXT FINANCE MINISTER
President-elect, Gustavo Petro announced José Antonio Ocampo as Finance Minister, indicating that Minister Ocampo will be in charge of leading tax reform and preparing a National Development Plan before December 2022.
Ocampo is one of the most recognized economists in Colombia, with ample experience in the public sector. He was educated at Notre Dame University and holds a Ph.D. in Economics from Yale. Ocampo was previously Finance Minister in 1994. He also has experience as Agriculture Minister and Director of National Planning Department (Departamento Nacional de Planeación—DNP). Between 2017 and 2020 he was on BanRep’s Board. On the international front, Ocampo was executive secretary in CEPAL.
Before being named minister he was professor at Columbia University. In a recent article Ocampo recognized that fiscal challenges are great.
We think the announcement is market positive as Ocampo is among the more orthodox of potential candidates for Finance Minister. He is expected to defend institutions, respect the independence of the central bank and the fiscal rule. And he is in favour of fiscal reforms that would ensure compatibility with the social program of the president-elect.
—Sergio Olarte, Maria (Tatiana) Mejía & Jackeline Piraján
This report has been prepared by Scotiabank Economics as a resource for the clients of Scotiabank. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotiabank nor any of its officers, directors, partners, employees or affiliates accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents.
These reports are provided to you for informational purposes only. This report is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any financial instrument, nor shall this report be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The information contained in this report is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a “call to action” or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. Scotiabank may engage in transactions in a manner inconsistent with the views discussed this report and may have positions, or be in the process of acquiring or disposing of positions, referred to in this report.
Scotiabank, its affiliates and any of their respective officers, directors and employees may from time to time take positions in currencies, act as managers, co-managers or underwriters of a public offering or act as principals or agents, deal in, own or act as market makers or advisors, brokers or commercial and/or investment bankers in relation to securities or related derivatives. As a result of these actions, Scotiabank may receive remuneration. All Scotiabank products and services are subject to the terms of applicable agreements and local regulations. Officers, directors and employees of Scotiabank and its affiliates may serve as directors of corporations.
Any securities discussed in this report may not be suitable for all investors. Scotiabank recommends that investors independently evaluate any issuer and security discussed in this report, and consult with any advisors they deem necessary prior to making any investment.
This report and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced without the prior express written consent of Scotiabank.
™ Trademark of The Bank of Nova Scotia. Used under license, where applicable.
Scotiabank, together with “Global Banking and Markets”, is a marketing name for the global corporate and investment banking and capital markets businesses of The Bank of Nova Scotia and certain of its affiliates in the countries where they operate, including; Scotiabank Europe plc; Scotiabank (Ireland) Designated Activity Company; Scotiabank Inverlat S.A., Institución de Banca Múltiple, Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Casa de Bolsa, S.A. de C.V., Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Derivados S.A. de C.V. – all members of the Scotiabank group and authorized users of the Scotiabank mark. The Bank of Nova Scotia is incorporated in Canada with limited liability and is authorised and regulated by the Office of the Superintendent of Financial Institutions Canada. The Bank of Nova Scotia is authorized by the UK Prudential Regulation Authority and is subject to regulation by the UK Financial Conduct Authority and limited regulation by the UK Prudential Regulation Authority. Details about the extent of The Bank of Nova Scotia's regulation by the UK Prudential Regulation Authority are available from us on request. Scotiabank Europe plc is authorized by the UK Prudential Regulation Authority and regulated by the UK Financial Conduct Authority and the UK Prudential Regulation Authority.
Scotiabank Inverlat, S.A., Scotia Inverlat Casa de Bolsa, S.A. de C.V, Grupo Financiero Scotiabank Inverlat, and Scotia Inverlat Derivados, S.A. de C.V., are each authorized and regulated by the Mexican financial authorities.
Not all products and services are offered in all jurisdictions. Services described are available in jurisdictions where permitted by law.