Latin America’s Consumer Trends: Picking The Winners

Latin America’s private consumption trajectory will remain mixed in 2013. We identify three key trends below:

Accelerating consumption: Brazil and Colombia

In Brazil’s case, the acceleration in private consumption is mostly due to base effects following a weak 2012. However, Colombia offers a much more compelling consumer story, driven by robust macroeconomic fundamentals, rising disposable incomes, and a strong currency.

Moderating, yet robust consumption: Chile, Peru and Mexico

Chile and Peru will see private consumption growth moderate this year. Weaker growth in China in H2 2013 will mean a fall in metal exports, and this decline will feed through to Latin consumption. In Mexico’s case, monetary easing will support consumption, and strong macroeconomic fundamentals paint an attractive consumer story for the next few years.

Weakened consumption: Argentina and Venezuela

In Venezuela, the devaluation of the bolívar currency in February will weigh on purchasing power. In Argentina, we expect a currency devaluation later this year, which will have a similar impact on the consumer as in Venezuela.

Full analysis of Latin American economies is available to subscribers at Business Monitor Online.