Donald Trump successfully ascending to the White House in November could spell real problems for Latin American investors, according to EMD expert Claudia Calich. The Republican frontrunner has been an outspoken advocate of deporting 11 million migrants and impounding all remittance payments derived from ‘illegal’ wages. Calich, who runs the M&G Emerging Markets Bond fund, said Trump’s potential policies on countries with large immigrant populations in the US, such as Mexico and the Dominican Republic, would be hugely detrimental for the region.
‘Remittances benefit receiving countries as they reduce their current account deficits and have a positive impact on domestic consumption and growth, although studies have also pointed out some negative impact through increasing income inequalities or potential for currency appreciation, making exports less competitive,’ she said.
While Mexico has the largest number of absolute immigrants in the US, according to data compiled by Calich, unauthorised remittances make up 1.3% of its GDP…
“Let’s hope that common sense and the impracticality of deporting 11 million people prevails in the end.”
[Source: CityWire Selector – Author: Dalvinder Kular – March 15, 2016]
