Banco Bilbao Vizcaya Argentaria, SA (BBVA) maintains that Latin America’s economy is moving at two different speeds. Speeding up are the Pacific Alliance countries (Chile, Colombia, Mexico and Peru), and shifting into reverse is Mercosur, which comprises Argentina, Bolivia, Brazil, Paraguay, Uruguay, and Venezuela.

BBVA projects that the Pacific Alliance will achieve between 2% and 2.5% GDP growth in 2016, which is less than in 2015 (2.6%) and below the 3.8% that BBVA officials believe is the trade bloc’s potential. But they see the growth rate improving later this year and into 2016. Peru is forecast to show the greatest GDP growth (3.6%) in 2016; Chile the lowest (1.8%). Peru’s upward projection is based on anticipation that the country will be less impacted by the annual weather phenomenon, El Niño.

In 2017, BBVA forecasts 2.8% GDP growth in the Pacific Alliance economies. Currently, the Pacific Alliance is ranked as the 6th largest economy in the world. BBVA officials maintain that it will rise to fifth in terms of contribution to global growth in the next 10 years.

Meanwhile, Mercosur's economy is forecast to contract by about 3.4%, with the recession in Brazil providing most of the drag. In 2016, Brazil’s GDP growth is forecast to be -3.0%, but this is expected to rise to 1.3% in 2017. Estimates for Paraguay are more in line with those of the Pacific Alliance. BBVA forecasts GDP growth of 2.7% in 2016 and 3.4% in 2017.

In its first quarter 2016 outlook, BBVA lowered its forecast for global GDP growth in 2016 to 3.2%, but expects a more robust recovery by year-end and 2017. As well as its depressed global outlook, its 2016 growth projections for all Latin American countries except Peru also got downward revisions. According to BBVA officials, market pressures have particularly increased on countries that are relatively dependent on external financing and commodity exporters – especially commodity exports to China.

 For Pacific Alliance members, BBVA reports that for 2015 there has been a 17.54% decrease in exports, and a 10.23% decline in imports. In Mercosur, the 2015 average percentage change was -10.23% for exports and -17.31% imports.