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Private players replaced state-owned companies as Argentina's biggest borrowers; economic growth in Latin America is dragged down by political risks in its biggest economies; and Mexico's growth prospects are now seen to rely more on domestic issues.

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The private sector displaced the State as the main debtor of the banks

Private players in Argentina have replaced state-owned companies as the largest debtors of the country's banks, according to Florencia Donovan of La Nacion. Compared to December 2015, where seven of the top 10 borrowers in Argentina's financial system were state-run oil and energy firms, the latest data shows that only two public companies were in the top 10 and the rest are privately owned. In the past, the financing of frozen utility tariffs in public corporations had made a dent in the banking system, but "as gas and electricity rates became clearer," the firms were able to improve their cash positions to pay off those liabilities. "The economy starts to work differently," an economist notes. "Those who are starting to need anchoring are the private ones."

Cutbacks in Brazil add to pressure for pensions overhaul

Despite the public outrage caused by spending cuts in Brazil, the administration of Michel Temer should soldier on with its widely unpopular austerity program if it wants to maintain any financial credibility, Joe Leahy and Andres Schipani write for the Financial Times. The budget freeze is causing all sorts of problems for government offices, with requests for passport renewals being turned down and the police force worrying about having no fuel for patrol cars due to the absence of funds. This is a big test for Temer, who promised sweeping fiscal reforms to fix the country's immense deficits but has met a huge bottleneck when he got embroiled in the country's corruption scandal which placed his popularity ratings at an all-time low. As an analyst notes, "the political developments did curtail the economic team's ability to deliver the austerity plan," but Temer would only place his successor "in a difficult situation" if he isn't able to pass the hugely despised pensions reform before next year's elections, the authors remark.

Mexican growth seen more dependent on domestic issues

As fears about the "Trump effect" on Mexico subside, the country's growth is now banking more on domestic affairs including politics and public security, Anthony Harrup reports for The Wall Street Journal. Growth forecasts have improved as NAFTA renegotiations are not expected to impact overall trade between the U.S. and Mexico. However, a central bank survey of 35 analysts placed the level of concern at a 5.3 average on a scale of 1 to 7, with 7 indicating the most limitations to growth. Analysts are now more worried about next year's presidential election, with opinion polls showing leftist presidential hopeful Andrés Manuel López Obrador taking the lead. Rising criminal rates, low oil production and high inflation are also seen as possible growth bumps. On a positive note, business and consumer confidence are on the rise in Mexico, with the peso at its strongest level in more than a year and unemployment at an 11-year low, the report says.

Latin American panorama: slowness in economies and political uncertainty

The outlook for economic growth in Latin America is bogged down by political instability in the countries most responsible for the overall production in the region, Giovanni Reyes pens for Portafolio. The International Monetary Fund forecasts growth in the region to have low recuperation rates of between 0.9% and 1.4% in 2017, as economies like Brazil, Mexico, Argentina and Venezuela face political risks. Median economies in Chile and Colombia are also facing high inequality conditions which affect their growth prospects. While there are stable and promising economies — Costa Rica, Panama and Uruguay are considered as some of the region's most functional economies and societies — their production volumes are not enough to impact regional gross domestic product, Reyes notes.