Latin America has macroeconomic margin to face what is coming: Ana Botín

Madrid, Spain.- Without minimizing the complicated scenario that will be faced in 2023 as a consequence, mainly, of an environment of high inflation and the consequent rise in interest rates to try to contain it, the president of Banco Santander at a global level, Ana Botinconsidered that in recent decades, Latin America has done its homework and is better prepared than other regions to deal with what is coming.

When inaugurating the XIX Santander Latin America Meetinghighlighted that, based on the forecasts of the International Monetary Fund (IMF), the greatest global slowdown in two decades will be seen, as well as the worst inflation since 1996.

However, he pointed out that Latin America, mainly countries such as Mexico y Brazil —representing 60% of the Gross domestic product (GDP) of the region—is better positioned than in other crises.

“For me, the best way to summarize where Latin America is today compared to the rest of the world, in a relatively better position than in other crises, is if we take Brazil and Mexico, and these are projections from the International Monetary Fund from two weeks ago. , the expectation in 2023 is that they will grow more than the United States, with inflation equal to or less than that of Germany”, he explained.

He explained that this derives from the fact that the region, and its governments in general, have learned how to better manage the crisis at the macro level.

As an example, he mentioned the good management carried out by the central bank of Brazil, which today allows inflation to go down for three consecutive months, in addition to the fact that the currencies of this country and that of Mexico are among the few that have appreciated against the dollar.

In the case of Mexico, he added that fiscal policy has also been important to be able to fight inflation, and highlighted that in 2020 the budget closed in balance and in 2021 it registered a surplus of 0.8 percent.

“This combination of prudent fiscal and monetary policies, and openness to trade, explains the behavior of the currencies,” he said.

He added: “the great message is that in these last two decades, Latin America has done its homework, macroeconomic management has improved and is among the best in the world, the fixed exchange rate, the independence of central banks, investment foreign, international reserves.

She said she was convinced that Latin America will emerge stronger from this crisis. “Geopolitics and other trends are also in favor this time, and I think that in Santander we want to support the region in this new stage.”

In this sense, he stressed that there is macroeconomic margin in the region to face what is coming, but they are minimizing it.

Strengths of Mexico

In the case of Mexico, the president of Santander highlighted as advantages to overcome what is coming: the primary deficit, as well as foreign investment flows, and the connection with the United States and Canada, which she pointed out as an opportunity.

“All the geopolitical trends position Mexico as one of the most attractive countries in the world, because clearly all the supply chains are going to be closer and we are already seeing it (…) so I think there is a very good opportunity. important for the country in the coming years”, he emphasized.

Solid financial systems

Ana Botín commented that, on this occasion, the banks are not part of the problem but of the solution, and mentioned that in Latin America as well as Europe and the United States, the regulated financial systems are solid and have good levels of capital, so who are capable of supporting their clients in times like the present.

“Nothing that we see now in the markets suggests that this is going to change and it is important. We banks want to continue to be an important part of the solution, as we were during Covid, and we will do so,” he said.

After leaving the Banamex process, they will grow organically

And after Santander was left out of the bid for Banamex in its sale process by the American Citigroup, Botín emphasized that they continue to invest in Mexico, seeking to grow organically, and proof of this is that they have ratified the offer for what they lack to acquire the shares of their Mexican subsidiary, as well as the growth they have had in segments such as automotive credit and the acquisition business, where they have gained significant ground in recent years, among others.

“That is to say, what we are doing in Mexico, the United States and Spain, is that vision of doing a digital business with branches, this is what we really have to do: be much better in the customer experience, and be able to compete not only with banks, but with fintech and neobanks, with the advantage of having a significant customer base”, he pointed out.