NEW YORK, Dec. 22 (UPI) -- Stocks were up across Latin America this week, as local markets followed Wall Street up.
Brazilian officials said this week they still haven't decided if they'll renew a $14 billion standby loan with the International Monetary Fund.
Central Bank President Henrique Meirelles told reporters that nothing is final, despite local reports in the media that the government has indeed decided to renew its agreement with the IMF.
"The speculation is premature," Meirelles said.
But, the speculation is probably not inaccurate.
According to a report in the Folha de Sao Paulo newspaper, Finance Minister Antonio Palocci has convinced President Luiz Inacio Lula da Silva of the political need in renewing the accord.
Lula faces reelection in 2006. Palocci is convinced that the country needs the option of seeking funds from the IMF to help protect Lula's chances, as unforeseen external economic shocks could wreak havoc on the Lula campaign.
Additionally, having the option of taking money from the IMF reassures foreign investors, who are disinclined to appreciate what independence from the IMF means for Brazil's ability to act autonomously on domestic matters.
Or, rather, precisely for that reason, investors want to see Brazil retain links to the IMF, so that the Fund's orthodox economic requirements remain around the necks of Brazilian leaders.
According to most market forecasts, Brazil's economy is expected to grow by 5 percent this year. But Palocci is worried that the country will face tougher economic conditions in the year to come, which is why he is lobbying to maintain the relationship with the IMF.
Since he was elected, Lula and his top advisers have said they look forward to the day when they have independence from the IMF.
That sentiment held until recent weeks, as officials have been hinting that not renewing the standby loan with the IMF right now perhaps didn't make the most sense.
For the week, Brazil's Bovespa stock index gained 147 points to end at 25,723.
Argentina's economy continues to defy the doubters and expand.
In October, the government reported this week, the gross domestic product grew 6.6 percent as compared to the same month the previous year.
That is below the 7 percent year-on-year jump the market was expecting, but it will put the country's growth for this year at more than 8 percent.
October's reading was a 0.7 percent jump from September. For the 10 months ending in October, the rate was 8.6 percent higher than the same period the previous year.
The GDP jumped 8.3 percent in the third quarter, leading economists to forecast yearly growth of at least 8 percent. Last year, the economy grew 8.8 percent.
If the forecast for this year is correct, it would mean the country had regained nearly everything it lost during its four-year recession that included the sovereign default of late 2001.
Argentina's Merval stock index added 69 points to end at 1,322.
Mexican President Vicente Fox has asked the Supreme Court to throw out the 2005 budget approved by congress.
Fox said in a televised address that he was taking the historic move to ensure the balance of power between the three branches of government.
Fox is facing an opposition-dominated congress that has thwarted most of his efforts at reforms and, now, his most recent budget.
Markets in the nation haven't reacted to the confrontation yet, but that could change if there is a legal battle that drags on for a few months to sort out the budget crisis.
Opposition members in congress say the changes they've made to the budget will help spark the economy, as they direct more money to agriculture and education, rather than administrative costs.
But Fox says the congress is making the changes purely as a political attack. He said that the changes mean more money goes to state-level agencies - which are dominated by the opposition - while cutting much of the operational budget of federal agencies.
Mexico's IPC stock index gained 218 points this week to end at 12,712.
A Chilean statistics agency reported this week that the price of copper - Chile's top export - is likely to fall next year, as demand in the United States and Japan declines.
Cochilco, a government-run copper statistics agency, said that copper will sell for an average between $1.16 and $1.20 a pound next year.
The current price is $1.28 a pound.
A bad sign was that housing starts in the United States were down 13 percent in November. A typical U.S. home contains about 400 pounds of copper, according to the Copper Development Association in New York.
Chile is the world's leading exporter of copper.
Government officials say that output will increase next year, but that the continuing demand from China will help support prices, despite the expected lowered demand from the United States and Japan.
As the price of copper goes, so largely goes Chile's economy, though officials are working hard to change this with the development of other exports.
But any lowering in the price of copper is sure to have the government and investors worried that economic growth overall with slow.
For the week, Chile's IPSA stock index gained 24 points to close at 1,825.
Venezuela is expecting growth of between 5 and 6 percent next year, the central bank said Wednesday.
That is consistent with the government's budget for next year, which was based upon 5 percent growth.
If oil prices remain high next year, that would be a boon for the country and push growth up toward the 6 percent mark, officials said.
Profits from oil sales make up about half of Venezuela's revenue and more than 30 percent of the country's GDP.
The central bank declined to give its forecast for growth this year, but most forecasts are for GDP expansion of 14 percent, coming off a dreadful base-year of 2003.
For the week, Venezuela's IBC stock index added 219 points to close at 29,743.
Colombia's central bank this week cut interest rates for the first time since March, trimming the rate to 6.5 percent from 6.75 percent.
Officials said that in the medium and long-term, inflationary signals look promising, which allowed for the cut.
Also, the bank said this week that it is doubtful the country will see the 4 percent growth that was forecast for this year.
That slowed growth and the lack of inflation makes this the time for a small rate cut, the bank said.
Colombia's IGBC stock index gained 33 points to close at 4,173.
