South America

Ecuador has fully financed its budget for next year and is not looking for a new credit agreement with the International Monetary Fund (IMF), the country's economy minister said on Friday, adding that the government will maintain close ties with the fund, Reuters reported. The IMF this week concluded the latest review of its $6.5 billion financing agreement with Ecuador, opening the way for a final disbursement of $700 million to the South American nation.

The Central Reserve Bank of Peru on Friday slightly reduced its economic growth projection for 2023 to 2.9% from 3.0%, according to a report published by the central bank, Reuters reported. Annual inflation in the copper-rich South American country is seen reaching 8.2% in 2022 before declining to 3% in 2023, the central bank said. It sees a 2022 fiscal deficit of 1.6% of gross domestic product, compared to a previous forecast of 1.9%, the report noted.

Shares in Brazilian telecom firm Oi SA soared on Thursday after it revealed it was exiting bankruptcy protection, marking the closure of a restructuring process that lasted more than six years, Reuters reported. Oi filed in June 2016 for Brazil's then-biggest ever bankruptcy protection after running out of time to reorganize operations and restructure a multibillion-dollar debt amid a harsh recession in Latin America's largest economy.

Brazil's incoming finance minister Fernando Haddad on Wednesday said fiscal expansion would not help the economy at the moment, downplaying market jitters on an expected spending boost starting next year, Reuters reported. "There are situations that demand countercyclical actions ... but we are not at a moment when fiscal expansion will help the economy," he said in an interview with TV channel GloboNews.

Brazil's central bank aims to launch its digital currency in 2024 after a closed pilot program next year with financial institutions, bank president Roberto Campos Neto said on Tuesday, adding that the project had received international attention, Reuters reported. Campos Neto said that the design of the central bank's digital currency would encourage banks to tokenize their assets, with considerable efficiency gains.

Argentina's government will raise the floor for income taxes in January, the country's Economy Minister Sergio Massa said on Thursday, amid union demands to ease the burden on workers, Reuters reported. "With this tax relief, in 2023, no worker who earns less than 404,062 pesos (about $2,378 monthly) will pay the tax," Massa said in a tweet. The minister did not disclose the fiscal cost of the decision, which he said is set to benefit some 312,864 workers. The previous floor stood at 330,000 pesos ($1,942.32).

Industrial production in Brazil rose 0.3% in October from September, government statistics agency IBGE said on Friday, returning to positive territory after two consecutive monthly declines though still below pre-pandemic levels, Reuters reported. Production in October also grew 1.7% from a year earlier, slightly above market consensus of a 1.6% rise.

Brazil's economic growth slowed more than expected in the third quarter as higher interest rates affected household spending, underscoring challenges facing President-elect Luiz Inacio Lula da Silva next year, Reuters reported. Gross domestic product rose 0.4% in the three months to September, government statistics agency IBGE said on Thursday, below the 0.7% growth forecast by economists polled by Reuters. Brazil's central bank have raised borrowing costs to a nearly six-year high to battle double-digit inflation this year, which has begun to weigh on domestic demand.

Argentina’s central bank expects to keep its key interest rate unchanged at 75% until at least early next year as internal indicators show that monthly inflation is cooling, Bloomberg News reported. The central bank board is seeing slower monthly price gains in November and is preparing to hold its key rate if that forecast is confirmed, said the people, who asked not to be named because the discussions are private. The estimates the central bank tracks suggest monthly inflation could slow to about 5.5% in November, down from 6.3% in October.

A broad measure of Brazilian consumer and business credit default ratios rose in October to its highest level in almost four years, central bank data showed on Monday, amid high borrowing costs and aggressive monetary tightening, Reuters reported. The default ratio in non-earmarked loans increased to 4.2% from 4.1% in September, the highest since August 2018's 4.22%. At the same time, bank lending spreads were up to 30.3% from 28.6% the month before.