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Is this Latin America's perfect storm?

Wednesday, June 01, 2016 - 01:40

2016 has been a turbulent year for many Latin America economies. As Grace Pascoe reports, politics, low oil prices and Zika make up just some of the headwinds unnerving investors.

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Political unrest, low oil prices and the Zika virus ... It's been a rough year for Latin American economies. Brazil and Venezuela now firmly on the economist's radar. (SOUNDBITE) (English) CO FOUNDER, SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUHART STEWART, SAYING: "You have got the political issues and you can stretch that from Venezuela with the problems they have had there in terms of whether there is going to be anything from a political coup to an actual military coup or not. To somewhere like Brazil where we have the possibility of further impeachment for the president going through. And then the background to that, the commodity prices. So whether it is iron ore out of Brazil or copper out of Chile, or it is oil out of Venezuela, all of those have been really badly hit indeed." Venezuela is suffering from a severe recession, the world's highest inflation and food shortages. Airlines including LATAM and Lufthansa have pulled the plug on flights to the OPEC nation. And the Organization of American States now wants a meeting to see if any democratic rules have been breached by the socialist government. And as if Brazil hadn't enough to deal with - it's anti-corruption minister has now quit over leaked recordings suggesting he derailed a corruption probe. (SOUNDBITE) (English) CO FOUNDER, SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUHART STEWART, SAYING: "With the Olympics coming up, this should be the moment they are shining. And sadly with a combination of the Olympics, the question over the Zika virus and also the impeachment of the President, this is something they really don't need at the moment." While for Bolivia - this could be bottom of the wish list - scenes of police clashing with disabled protesters over benefits last week. And with textile workers this week. New flare-ups perhaps in yet another of the continent's economies.

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Is this Latin America's perfect storm?

Wednesday, June 01, 2016 - 01:40