BMI View: Project risk will remain high in Latin America, as the region continues to struggle with a relatively poor regulatory and contracting environment and political and security risks remain. However, we note improvements across the region, especially with the financing segment, where many countries are implementing reforms and using innovative financing structures to attract more private investment into infrastructure development. ...BMI View: Project risk will remain high in Latin America, as the region continues to struggle with a relatively poor regulatory and contracting environment and political and security risks remain. However, we note improvements across the region, especially with the financing segment, where many countries are implementing reforms and using innovative financing structures to attract more private investment into infrastructure development. Infrastructure development will continue to face headwinds in Latin America stemming from limited financing availability and persistent risks in both the construction and operational phases. ...Within the region there are large discrepancies across indicators, with noteworthy outperformers being Chile and Mexico. We also note a number of countries (Argentina, Colombia and Peru) where we expect reforms and institution building to pay dividends and improve scores, especially for financing availability.
...Across the region lower commodity prices have affected governments abilities to spend on project development, but the ability to adapt and maintain ambitious infrastructure development programmes has varied widely and with it, PRI scores. We have long noted the importance of private investment in the low commodity price environment, and expect countries that are able to reform and present attractive business environments to investors to outperform (see Latin America Infrastructure RRI: Private Sector Participation Propelling Outperformers , - July ----). ...Across the region lower commodity prices have affected governments abilities to spend on project development, but the ability to adapt and maintain ambitious infrastructure development programmes has varied widely and with it, PRI scores. We have long noted the importance of private investment in the low commodity price environment, and expect countries that are able to reform and present attractive business environments to investors to outperform (see Latin America Infrastructure RRI: Private Sector Participation Propelling Outperformers , - July ----). Among these, we include Chile and Mexico, our two leaders in the index. On the other hand, Venezuela, which is heavily dependent on oil exports, will remain near the bottom of our index, as the Maduro government continues to threaten further nationalisations and any meaningful reform remains unlikely. Additionally, heightened security and political risk remains prevalent in many countries, especially in Central America where the majority of countries fall below the global regional averages in our PRI.
...Real construction industry growth in the region will remain negative in ----, at --.- , as Brazil remains in recession and weakness in Argentina and Mexico as a result of major reforms weighs on headline growth. From ---- to ---- we expect annual average growth of -.- . ...
