LATAM WEEKAHEAD-Weak industrial output seen in Brazil, Chile

Sun Mar 29, 2009 2:06pm EDT
By Walter Brandimarte
NEW YORK, March 29 (Reuters) - Industrial production data due this week will likely show that the Brazilian and Chilean economies further deteriorated in February under the impact of the global crisis.
Chile's industrial output is expected to have declined 10.4 percent last month, Barclays Capital forecast, after falling 8.9 percent in January -- the worst result in a decade.
The report, due on Tuesday, will mark the fifth consecutive month of declining industrial production in the Andean country.
Brazil's industrial production report, due on Wednesday, is expected to show a decline of about 15 percent according to market consensus, more than in Chile but less the 17.2 percent plunge Brazil posted in January.
"A 17 percent (contraction) might have been the worst figure, but I think there will be some time before we see some positive figures," said Alvise Marino, emerging markets analyst with IDEAglobal in New York, who estimates Brazil's industrial production to have decreased 12.9 percent last month.
"The data we saw last week on the lending front was very bad, and I think that does not bode well for the manufacturing sector going forward."
The volume of new bank loans in Brazil fell 7.7 percent in February from the previous month, after plunging 17.6 percent in January, central bank data showed last week.
The following are some of the key data points investors will be watching this week. All forecasts are compiled by Thomson Reuters unless noted differently.
Monday March 30:
- Brazil's IGP-M inflation index for March is expected to show a 0.34 percent decline in wholesale prices, following a 0.26 percent increase in February.
Local commodity prices and the strength of the real are helping contain inflation in Brazil, said Barclays Capital.
- Mexico's February fiscal balance
Tuesday March 31:
- Brazil's February primary budget result is expected to be a surplus of about 800 billion reais, IDEAglobal's Marino said. Weaker numbers could be a "cold shower" for the market, he said, as investors are paying extra attention to the fiscal impact of the government's stimulus policies.