Despite Slowdown, Manufacturers Remain Optimistic On Latin American Market

“Latin America is an important market for Textron Aviation,” Bob Gibbs, vice president of sales for Latin America for the Cessna and Beechcraft parent company said. “Although the total Latin American market has remained stable over the last year, with a slight slowing of business in Brazil while the focus of the country was on the World Cup, the economic outlook for the region remains bright, with expectations of robust growth in wealth creation over the coming decade.”

According to Gibbs, Brazil, Mexico and Venezuela remain the company’s primary markets for business aircraft, with Brazil alone home to one third of the region’s business aircraft. “We expect these markets to continue leading Latin America’s considerable demand for business air travel in the coming years,” he added, “though the steadily growing economies of Paraguay, Peru and Chile are also expected to experience a growth in demand.”

Just fewer than 3,000 business aircraft are based in South America, Gibbs added, representing 9 percent of the global business aircraft fleet. “However,” he continued, “with Latin America’s ultra-high-net-worth population growth expected to outstrip both of those regions between now and 2023, we expect there to be a surge in demand for high-quality, flexible and efficient business aircraft as Latin American businesses impose themselves on the regional and global stage.”

Those sentiments were echoed by Fabio Rebello, regional senior vice president international sales in Latin America for Gulfstream Aerospace. “Gulfstream has had a lot of success in Latin America and has increased the number of aircraft in the region in 2014,” he added. “In the past five years, Gulfstream’s fleet in Latin America has grown nearly 70 percent. In total, we have more than 175 aircraft based in Latin America, with the three largest markets in Mexico, Brazil and Venezuela. The Gulfstream fleet in Brazil has nearly tripled in the past five years making it one of the fastest growing markets in Latin America for Gulfstream.”

Diverse Region, Diverse Missions

Although the need for regional transportation once drove the demand for business aircraft across Latin America, today’s buyers are increasingly seeking the ability to travel across borders and continents.

However, manufacturers of smaller aircraft are quick to note that demand for transportation to remote locations–many of which are not easily accessed by ground-based modes of transportation–remains strong in the Latin American market.

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Global economy’s new headwind: Gray hair

Leslie Shaffer | Writer for CNBC.com

“The demographic dividend that drove economic growth in the past will turn into a demographic tax that will ultimately slow this growth for most countries worldwide,” ratings service Moody’s said in a note Wednesday, citing the unprecedented speed of the population’s silvering.

By next year, more than 60 percent of the 112 countries it rates will be considered “aging,” with at least 7 percent of the population aged 65 or over.

By 2020, the number of super-aged societies, or those with more than 20 percent of the population aged 65 or over, will more than quadruple to 13 and by 2030, that number will surge to 34, compared with just three countries currently, Moody’s said.

“All countries, except a handful in Africa, will face either a slower-growing or declining working-age population, and corresponding pressures on labor supply” through 2030, it said, noting 16 countries will see their working-age population fall by more than 10 percent over the period. “Population aging will also reduce household savings rates, which will reduce investment.”

It cited Conference Board data indicating aging will slow aggregate annual growth rates by 0.4 percentage point in 2014-19 and 0.9 percentage point during 2020-25, shaving the 2.9 percent average annual growth rate over 1990-2005.

It’s not just a developed markets problem, with many emerging markets aging even more rapidly than their developed peers.

China’s working age population is expected to fall by 2.7 percent over 2015-30, while countries as diverse as Cuba, Russia, Hong Kong and Croatia are expected to see their working-age population fall by more than 10 percent over the same period, Moody’s said.

Read the full article at CNBC.com

Greece: Time to Invest Again?

By Marcus Bensasson

The country’s long-term local currency debt was upgraded to Caa1 from Caa3, New York-based Moody’s said in a statement yesterday. The nation’s short-term debt rating is unaffected and remains not prime, or NP.

The significant improvement in fiscal position over the past year and the view that the government remains committed to fiscal consolidation underpin a forecast of a gradual decline in public debt, Moody’s said. The credit-rating company also cited gains in Greece’s economic outlook, based on both a cyclical recovery and the progress made in implementing structural reforms and rebalancing the economy, further supporting the downward trajectory of the public debt ratio.

Greece’s economy will grow this year for the first time in seven years, the European Commission predicts. The country received two rescue packages with pledges totaling 240 billion euros ($322 billion) from the euro area and the International Monetary Fund and underwent the biggest sovereign debt restructuring in history in 2012.

Read the whole piece at Businessweek

Excessive healthcare in India trend can actually harm patients. WB

Excessive healthcare is emerging as a serious issue in India, the World Bank warned today, saying people with private health insurance are two to three times more likely to be hospitalised than the national average.

Many of these medical interventions deliver only marginal benefits and can actually harm the patients, leading to unnecessary suffering, especially among the frail and elderly, it said.

The harmful practice can worsen as, it said, many more people will be able to afford healthcare as the government ramps up medical coverage for poor households.

“Medical overuse is emerging as a serious issue in India, especially as more people can afford to pay for medical interventions due to increasing access to insurance cover.

Therefore, India urgently needs to learn from the experience of other countries and build in checks against this hazard, especially as it allocates a growing share of scarce public resources for medical insurance,” it said.

The World Bank’s warning comes amid concern expressed by Health Minister Harsh Vardhan over “corruption” in regulatory body Medical Council of India and the “nexus” of doctors and diagnostic centres, resulting in patients being asked for unnecessary tests.

“This is a critical time for India since the country is in the midst of building a healthcare system which will set conditions for decades to follow,” said Somil Nagpal, senior health specialist with the World Bank in India.

Prescribing unnecessary medical tests, procedures, hospitalisations and surgeries have become an epidemic worldwide, the World Bank said, adding the rates of caesarian sections, for instance, vary widely.

While globally the C-section rate in public hospitals is 10 percent, it reaches an alarming 98 percent in Brazil’s private hospitals, and 40 percent in private hospitals worldwide.

In the US alone, unnecessary medical care costs $250-300 billion annually by conservative estimates, it said, cautioning against the growing danger of the worldwide overuse of antibiotics that is causing a surge in hard-to-treat bugs.

The World Bank has identified the culture of “more medical intervention is better”, “slavish” use of medical technology even when it is not necessary and defensive medicine or “playing it safe” by prescribing additional tests or treatment among the leading factors behind the trend.

Irish central bank raises 2014 economic growth forecast to 2.5%

Ireland‘s central bank increased its economic growth forecast for 2014 to 2.5 percent from 2 percent on Monday, citing better than expected export growth underpinning a recovery beginning to firmly take hold.

The economy expanded 2.7 percent in the first quarter, having been stuck in neutral for the last two years. The central bank reiterated that the economy has now broadly stabilised and domestic demand will contribute to growth this year.

The government has said the brighter picture means it can ease back on planned austerity measures this year.

Reuters

The central bank said that while the amount of spending cuts and tax hikes required may be less than anticipated, ministers must tread carefully.

“Continuing to build on the achievements of recent years will be crucial in order to reduce vulnerabilities and ensure a sustainable return to steady growth,” the central bank said in its quarterly bulletin, referring to Ireland’s six years of austerity cuts.

Economists polled by Reuters see the economy growing by 2.3 percent this year, more than the 2.1 percent expansion the government predicted when it last updated its forecasts in April.

(Reporting by Padraic Halpin; Editing by Hugh Lawson)