Senior Economist
Fernando Soto joined BBVA Research in 2012, covering the Chilean economy for South America unit.
He previously worked as research economist in the investment bank branch of Banco de Chile -Banchile Inversiones-, covering both the Chilean and global economy. Additionally, he was research economist at the National Agriculture Society, for the design and implementation of public policies in the Chilean agricultural sector, with vast expertise in new mechanisms that warrant access to both financing and insurance markets to small and medium agriculture firms.
He has been undergraduate lecturer of Macroeconomics and Microeconomics courses at various universities in Chile both public and private.
He holds a M.Sc. in Economics and Public Policy, and a Bachelor degree of Business Administration (B.B.A.) with a mention in Economics, both from Pontificia Universidad Católica de Chile (UC).
Latest Publications
Eurozone | The outlook remains positive as political risks ease
GDP grew 0.5% QoQ in 1Q while soft data suggests higher momentum in 2Q (BBVAe: 0.6% QoQ) and foreign trade is strong. But industrial output and retail sales decelerated in 1Q. Inflation pressures are still distant as wages growth remains subdued. Despite the more upbeat outlook and the ease of political uncertainty, risks to short-term growth remain tilted to the downside.
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Global growth is still gaining momentum in 2Q17, but there are some signs of stabilisation
Global growth accelerated in 1Q to 0.9% QoQ and 2Q data so far suggest further global momentum (1% QoQ). Confidence data remain very positive, especially for developed economies, while hard data point to higher investment. Moreover, the exports recovery remains on track, partly explained by upward trend in investment in recent quarters.
Global | Positive dynamics lead to an upward revision in projections
Global GDP growth maintains its positive trend in 1H17 as our BBVA-GAIN indicator suggests (close to 1% QoQ). Confidence and global trade continue to point a further expansion, but signals given by hard data are not yet clear. New projections for 2017-18 are revised upwards in China, more moderately in EZ, with no changes in the US.
Eurozone | A more upbeat outlook, but still surrounded by (mostly political) risks
Our MICA-BBVA model estimates growth at 0.5% QoQ in 1Q as improving confidence continued at earlier 2017. Hard data begin to moderate, though foreign trade clearly recovers. Growth forecasts for 2017-18 are revised slightly upwards to 1.7% (+0.1pp) in both years, fostered by higher growth in global demand although risks, mostly political, remain tilted to the downside.
Eurozone | Robust growth in early 2017 and still low core inflation
After growing at 0.4% in 4Q16, our MICA-BBVA model continues to estimate a quarterly GDP growth in the eurozone of 0.5% QoQ in 1Q17 and puts a slight upward bias to our projection of 1.6% for this year. Confidence indicators reflect this mood better than activity data. Finally, despite the 2.0% YoY headline inflation in February, core measures remain subdued at 0.9% YoY.
Global | Global growth points to 0.9%-1% in early 2017
Global GDP growth continues accelerating in Q1, though our BBVA-GAIN indicator of global growth is slightly lower than a month ago (Q4: 0.85%; Q1: 0.93%). Confidence indicators continue to be very strong and global trade gives signals of further expansion, but industrial production and especially retail sales are more moderate in early year.
Eurozone | A slight upward revision to our GDP growth projections
Our MICA-BBVA model estimates growth to reach 0.5% QoQ in 1Q (2H16: 0.4%) as improving confidence at the start of 2017 suggest that the recovery could be gaining momentum in 1Q17. We have revised slightly upward our growth projections to 1.6% this year and next, though political risks persist.
Global | More growth, but with old and new risks across regions
Global growth strengthened in 2H16 (+0.9% QoQ) and it could be gathering pace in 1Q17 (+1.0% QoQ), as our GAIN-model suggests, driven mostly by industrial activity and improving global trade. New quarterly projections remain broadly unchanged, with differences across regions, while risks are tilted to the downside and are mostly of a political nature.
Global Watch | Improving activity, but higher uncertainty
Global growth has stepped up further in 4Q16 (+0.9% QoQ), as our GAIN-model suggests, driven mostly by industrial activity and stronger confidence along with improving global trade and higher new orders. Nonetheless, risks are tilted to the downside and are linked to politics and protectionism, but also derive from China’s imbalances.
Eurozone | Some changes for the better
We continue to see resilience to the various potentially disturbing political events in 2H16. So far, confidence data allow us to be slightly more optimistic. Still more, the recovery of exports and the strength of consumption at the end of 2016 show that positive underlying signs are taking root. Our model suggests GDP to have gained momentum to 0.5%/0.6% QoQ in 4Q16.
Eurozone | Soft data point at growth acceleration in Q4, though downward risks prevail
Our MICA-BBVA model estimates growth to increase to 0.4/0.5% QoQ in 4Q (3Q: 0.3%). Improving confidence proved the EZ resilience after political events since the summer, while data so far suggest a slightly more optimistic outlook for coming months supported by export orders and the depreciation of the euro. However, risks (mostly political) remain tilted to the downside.
Global | Broadly unchanged global outlook after Trump´s victory, with uncertainty
Global growth is expected to gain further momentum in 4Q16 (+0.9% QoQ), as our GAIN-BBVA model suggests, in a context of a better performance of developed countries than emerging economies. Nonetheless, short-term risks continued to be tilted to the downside and mostly political, but also derived from China’s imbalances.
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Global | Slight improvement amid high uncertainty
Global growth accelerated to 0.8% QoQ in 3Q driven by the rebound in the US and the resilience in both EZ and Asia, while the recession in Latam eased. Incoming data points to a strengthening recovery in emerging Asia, mainly supported by domestic demand but also by improving trade while the industrial recovery in developed markets gathers momentum.
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Eurozone | Steady recovery, resilient to political uncertainty
The moderate pace of economic growth continued in the eurozone in 3Q16 (+0.3% QoQ), in a context of improved external demand and resilience after the uncertainty experienced by mid-year. We maintain our GDP growth projection for the eurozone at 1.6% and 1.5% in 2016 and 2017, respectively.
Eurozone | An improvement in the third quarter, with caution
Our MICA-BBVA indicator estimates quarterly GDP growth in the eurozone to gain some momentum to 0.4% in Q3 (Q2: 0.3%) due to better-than-expected hard data in August that point to stronger private consumption and investment in Q3. However, the still weak global demand and the moderate euro appreciation so far this year could weigh on exports and the industrial sector.
Eurozone | Economic Watch – September
Economic recovery should continue in 3Q16 but at slower pace. Our estimates suggest quarterly GDP growth to decelerate slightly to +0.2% QoQ in 3Q16 -after a +0.3% QoQ figure in 2Q16-, in the back of still weak investment and lower contribution from net exports. Private consumption should remain as the main driver for GDP growth.
Chile | Economic activity slows down in May loosing what was gained earlier this year
The economy does not show signs of recovery and is expanding by 1.8% YoY in May (consensus: 1.5%; BBVAe: 1.9%) with no variation with respect to the end of 2015; losing what was gained at the beginning of the year. We expect growth in the Imacec of June between 1% and 1.5%, while in 2017 we forecast a GDP expansion below 2%.
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Chile | IMACEC with a ceiling of 2% YoY in May – Labor market depreciation surges
In May, activity by sector shows that the economy is in a weakening phase with significant impact on employment. The unemployment rate in May was of 6.8%, which is the highest since 2011, with high probability of increasing beyond 7% in the following months. As a result, we estimate that the economy has not grown more than 2% YoY in May.
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Chile | Central bank kept policy rate at 3.5% and modifies the restrictive tone
The Board stressed that the pace of future adjustment will be the implicit in its latest baseline scenario. Nonetheless, points out that a significant deviation of the convergence of the inflation may change said pace, which we interpret as a hawkish tone for the Monetary Policy Rate, due the risk for a more depreciation from the volatility in the international scenario.
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Chile | CPI inflation decelerated more than expected in May
CPI inflation in May increased 0.2% MoM (+4.2% YoY), below both our and market expectations (+0.3% MoM). The figure was mainly driven by transitory factors, coming from a supply shock in perishable foods. We expect a CPI inflation for June in a range between 0.2% and 0.3% MoM and reinforce our forecast at 3.2% YoY for the end of 2016.
Available in Spanish