MercoPress. South Atlantic News Agency

Barclays’ upbeat about Latam’s “remarkably strong” recovery in 2010

Growth estimate for the region has been raised from 3.6% to 4.4%

Latin America’s economic recovery will be “remarkably strong,” bolstering currencies and spurring interest rate increases in 2010, Barclays Plc said.

“We expect a strong 2010,” Barclays analysts wrote in the bank’s emerging-markets quarterly report this week. “Robust growth prospects in Latin America bode well for capital inflows, equity prices and currencies appreciation.”

The Brazilian real and the Mexico peso offer the most potential “to trade the region’s rebound,” the analysts wrote. They raised their estimate for Latin America growth in 2010 to 4.4% from 3.6%.

Central banks across Latin America reduced interest rates to record lows to spur consumer spending amid the worst global recession since the Great Depression. Mexico may raise its rate in March, followed by Chile in April, Barclays said. Brazil may increase its benchmark rate in July, according to the report.

Peru may be the only country in Latin America to cut interest rates further, Barclays said.

“With lower-than-expected growth and below-target inflation, it is not possible to discard further cuts,” the report said.

Peru’s economy will expand 0.9% this year, according to Barclays estimates, below the 2.5% forecast by the government. Inflation, which slowed for a ninth month in August to 1.87%, will end 2009 at the lower end of Peru’s central bank 1-to-3 percent target rate, the bank said Sept. 11.

Barclays said the global economic rebound will be “sharper and last longer than we previously anticipated,” with all the regions contributing to expansion. The growth forecasts for the Europe, Middle East and Africa region, known as EMEA, was increased to 2.9% from 1.4% expected in the previous quarterly report.