Latin America prepares for economic downturn
Washington, DC, United States (AHN) – Latin American finance ministers are trying to shield their countries from disaster amid predictions U.S. government budget cutbacks could hurt the region’s economies.
Economic ministers from the 11-nation Unasur organization met last week in Buenos Aires, Argentina, to discuss defensive strategies. They are working on an agreement that would create a roughly $12 billion emergency fund to bail out collapsing economies.
They also seek to reduce their dependence on the U.S. dollar for international trade and to develop policies to balance their trade deficits.
Unasur consists of Brazil, Colombia, Bolivia, Chile, Ecuador, Guyana, Paraguay, Peru, Surinam, Uruguay and Venezuela.
So far, Latin America’s economy has avoided the worst of the economic collapses in the United States and Europe that began in 2008 with a stock market collapse and recession. A brief drop in commodities prices along with government spending programs that shored up declining industries helped them avoid the worst of the crisis. However, economists predict the resilience of Latin American economies will not last much longer.
South American economies grew at an average of 6.6 percent last year, according to the International Monetary Fund.The Fund’s economists predict growth will slow to 4.7 percent this year and 4.1 percent in 2012.
By comparison, U.S. economic growth this year is running at 2 percent. Some European countries are showing no growth.
Stock markets in Latin American countries fell as much as 15 percent last week on news the credit rating service Standard & Poor’s downgraded the U.S. credit rating to double-A plus from triple-A.
Augusto de la Torre, the World Bank’s chief economist for Latin America and the Caribbean, said this week the outlook for Latin America is uncertain as concerns grow about another crisis for the United States and Europe.
China could be the next to falter as Western markets dry up for their manufactured products, he said.
“If China has a hard landing, that will hit us hard,” de la Torre told the Peruvian news media during an economic meeting.
Unasur leaders are exploring options to increase trade with China as its Western markets for manufactured products fizzle.
Protecting the economy is a major campaign issue in Argentina, where current president Cristina Fernandez won a landslide victory in primary elections this week.
She said at a press conference after the primaries that keeping Argentina’s economy strong would be a top priority for her if she is re-elected in October.
Low-income persons are most likely to be hurt by U.S. budget cuts that could reverberate around the world, including Argentina, she said.
Wall Street economists warn that her policies of price controls and using central bank reserves to pay debts could backfire for South America’s third largest economy.
The policies strengthen government control but depress market forces that help to balance the economy, according to some economists.
Argentina’s inflation rate is running close to 25 percent.
Other economic concerns are arising in Brazil, where inexpensive imported products are hurting the domestic manufacturing industry.
Chile and Peru still have stable economies as investors try to protect their assets by purchasing gold and copper, but economists predict declines in the precious metals market.
A decrease in demand for oil is depressing the economies of Venezuela and Mexico.
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Hurricane season 2011: U.S. will likely take direct hit
Miami, FL, United States (AHN) – The National Oceanic and Atmospheric Administration announced its forecast for the 2011 Atlantic hurricane season Thursday morning. Experts say it is unlikely the U.S. will escape a direct hurricane hit during this busy Atlantic season.
Arlene, Bret, Cindy and Don are just a few of a long list of North Atlantic storms that could deluge the country and Caribbean this season.
Experts are predicting three to six major hurricanes, six to 10 hurricanes and 12 to 18 named storms. A major hurricane is defined as any Category 3 to Category 5 storm, or sustained winds of 111 mph and up.
NOAA’s predictions were similar to those of a prominent group of forecasters from the University of Colorado, who said they expect 16 named storms, nine hurricanes and five major hurricanes.
The National Hurricane Center said the average hurricane season has 11 named storms, six hurricanes and two major hurricanes.
This season, however, has a 65 percent chance of being above normal, a 25 percent chance of being near normal and a 10 percent chance of being below normal.
Colorado State University scientist Phil Klotzbach, who issues seasonal predictions, said warm sea surface temperatures in the tropical Atlantic Ocean, which favor storm formation, combined with sea level pressures that likely will be lower than normal, could spawn more activity.
“The United States was fortunate last year,” said Jane Lubchenco, administrator of the National Oceanic and Atmospheric Administration in a Houston Chronicle report. “We can’t count on luck to get us through this season.”
Hurricane season begins June 1.
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“Active” Atlantic hurricane season predicted for 2011
Miami, FL, United States (AHN) – An annual report predicting an “active” hurricane season in 2011 has been released. Colorado State University’s Tropical Meteorology Project predicts nine Atlantic hurricanes during a busy season.
“We continue to foresee well above-average activity for the 2011 Atlantic hurricane season,” report authors Philip Klotzbach and William Gray explained. “Our seasonal forecast has been reduced slightly from early December… we continue to anticipate an above-average probability of United States and Caribbean major hurricane landfall.”
In December, the team predicted 17 named storms and nine hurricanes. Now, their updated estimate calls for 16 named storms and nine hurricanes.
The Atlantic hurricane season lasts from June 1 until Nov. 30.
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Nestle Reports Strong Nine-Month Sales
Vevey, Switzerland (AHN) – Nestle reported better-than-expected sales in the first nine months of the year on Friday and maintained its forecast for the full year.
Sales from January through September grew to 82.8 billion Swiss francs ($85.2 billion), up 4.1 percent from 79.5 billion Swiss francs ($81.8 billion) during the same period last year.
Foreign exchange reduced revenues by 2.7 percent, while acquisitions added 0.7 percent, putting organic growth, which excludes the effects of currency, acquisitions and divestments, at 6.1 percent.
Revenues from food and beverage businesses jumped 5.7 percent, excluding currency changes that left sales 2.8 percent less, and acquisitions that added 1.6 percent.
Organic growth for food and beverage in the Americas was 5.5 percent. The world’s largest food manufacturer reported “broad-based improvements” in North America that compensated for continued weak demand for the premium segment of the ice cream market as well as frozen food products such as Lean Cuisine and Lean Pockets.
In Europe, sales increased 3.3 percent despite “challenging” demand in Russia. Growth was led by brands from various categories, including Herta in prepared meats products and Friskies and ProPlan in petcare.
In emerging markets in Asia, Africa and Oceania, organic growth was 11 percent, fueled by sales from Maggi Noodles and Nestea Litro. Nestle plans to support such rapid growth with new facilities launched in the third quarter, such as an infant cereal factory in Ghana and a CoffeeMate plant in Latin America and the Caribbean.
Other food and beverage brands such as Nespresso performed well worldwide. In its largest European markets, the premium coffee grew more than 20 percent.
The Switzerland-based company, which does not report quarterly earnings, said it continues its expansion of Nespresso boutiques worldwide and will have 220 stores by the year’s end.
Nestle’s forecast for the full year remains at about 5 percent organic growth for food and beverage. The company expects improvements in its operating profit margin.
“The first half’s growth momentum continued unabated in the third quarter, providing a good base for the full year as we face challenging comparatives in the final quarter,” chief executive Paul Bulcke said in a statement.
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