A High Level Assessment Of The Global Economic Outlook

A high-level assessment of the Global Economic Outlook will be provided in this section along with a Regional and a Country-specific Outlook. This macroeconomic view of environmental conditions will serve as the foundational element and will set the guiding principles to conduct in-depth industry and company-wide analyses. Global Economic Outlook According to the World Economic Forum’s Global Challenge Initiative, there is a generalized slowdown in emerging market economies, a lowering of commodity prices, international political uncertainty and a gradual tightening of monetary policy in the US. The road to recovery must address: †¢ Loss of confidence on the economic system’s ability to deliver sustained economic growth †¢ Barriers to†¦show more content†¦Meanwhile, we expect growth to firm in Mexico as the US recovery strengthens. However, inflation expectations remain elevated on the back of a possible hike in the minimum wage. Notwithstanding the current spotlight on the drugs war, Mexico is expected to grow just below the average annual inflation rate on the back of higher private sector investment and increased government spending. Transfer risks and sovereign default risks are elevated in Argentina and Venezuela as foreign reserves slid by 20% and 8% respectively in 2015.Political tensions persist in Venezuela, as the scarcity of basic goods and services is acute despite drastic government controls. Additional intervention in the retail sector is likely to ensue. A gradual improvement in Peru and Chile (linked to expected improvements in the global economy) is also anticipated. The Chilean senate s approval of a package of tax reform means firms face higher tax liabilities in the coming year. Peru will seek to forge stronger regional relations with neighboring countries; especially Brazil with which it already enjoys robust trade and investment ties. The country will also continue to favor regional integration efforts, such as the Union of South American Nations and the recently established Pacific Alliance, a trade bloc also comprising Chile, Colombia, Costa Rica and Mexico. The recent ruling of the