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An Interview with Bank of America's Ehiwario Efeyini

Ehiwario Efeyini

Ehiwario Efeyini presents in Miami. (Image: Alex Gort)

October 11, 2016

After two years of being hit by a strong recession, Latin America is on a slow path to recovery that has already provided positive results for stock market investors. 

That was one of the conclusions at the most recent Council of the Americas CFO Forum in Miami on September 30. The first session of the event was a 2017 economic forecast and outlook by Ehiwario Efeyini, senior vice president and senior research analyst at U.S. Trust, Bank of America Private Wealth Management. 

In an interview with Latin Trade, Efeyini gave his outlook for Latin America over the next 12 months. 

"A forecast published by Bloomberg shows that Latin America's economy will go from a 1.3 percent drop this year to 1.9 percent growth next year," he said. That recovery is clearly anemic, he added, particularly when compared to developed economies such as the United States' projected growth of 2.2 percent next year. 

But all economic recovery, however small, presents an opportunity. 

"The biggest returns on investments come when economies transition from recession to recovery," Efeyini said.

In fact, he added, investors are already taking advantage of Latin America's growth prospects. This is especially noticeable in that the region has seen the best performance among emerging markets, with a stock valuation of 35 percent during 2016, compared with 17 percent in other emerging markets.

Latin America's recovery will be boosted mainly by Brazil. According to Efeyini, the region's number one economy has gone through three years of severe recession and its GDP will drop 3.3 percent this year, but will grow 1 percent in 2017.

However, he added, Brazil's recovery largely depends on how far the government can go with its reform plans aimed at lowering fiscal deficit.

For Efeyini, Mexico will be another driving factor behind the region's recovery. In fact, Mexico could be one of the best performing economies thanks to optimism around its energy reform and its ties with the United States.

This interview was conducted by Latin Trade.