LATAM WEEKAHEAD-Brazil Q2 GDP to headline LatAm data deluge

NEW YORK, Sept 6 (Reuters) - Brazil's second-quarter gross domestic product report and regional inflation numbers will dominate Latin America's data landscape in the coming week.

On Friday, Brazil's GDP report is expected to show Latin America's largest economy grew 1.6 percent from the prior quarter, but was still contracting 1.5 percent from the same period a year ago, according to the latest Reuters poll. [ID:nSPG002488]

Brazil's Finance Minister Guido Mantega was even more optimistic, projecting growth of 1.8 percent to 2 percent in the second quarter, while speaking to reporters on the sidelines of a G20 finance ministers' summit in London on Friday. [ID:nL423606]

"The nearly uninterrupted stream of strong data released over the course of the past quarter has set the bar for Brazil's Q2 '09 GDP high up," Alvise Marino, emerging markets analyst at IDEAglobal, wrote on Friday.

This is "fueling expectations that the economy has already returned to positive quarter-on-quarter growth and the year-on-year rate will be much closer to the zero notch than expected even just a few months ago," Marino wrote.

On the economic policy front, Mexican President Felipe Calderon on Tuesday will send to Congress his 2010 budget proposal, including plans to raise taxes, cut spending and expand the budget deficit.

Mexico faces a 300 billion peso ($22 billion) shortfall after the economy sank this year into its deepest recession since the 1930s.

Meanwhile, inflation reports from Argentina, Brazil, Chile and Mexico are expected to show just modest or no increases.

Chile kicks off the week's data with its July IMACEC economic activity index on Monday, Sept. 7. According to a Reuters poll of economists, the index is forecast to decline 3.2 percent.

Chile is also expected to report August inflation data on Tuesday. A Reuters poll expects inflation to have dropped 0.20 percent last month.

The following are some other key data points investors will be watching this week:

Monday Sept. 7:

* Chile - August trade balance. Morgan Stanley and Barclays Capital both forecast a trade surplus of $700 million, down from $881 million in July.

"Weekly data indicate trade flows weakened in August, possibly causing a soft patch in activity," Barclays said.

Tuesday Sept. 8:

* Chile - Monetary policy meeting. Benchmark interest rates are expected to hold steady at 0.50 percent, according to economists.

"With very limited space for further adjustment on the rate front, monetary policy is bound to focus on possible additional measures at the upcoming meeting, also as suggested by the most recent minutes," Marino at IDEAglobal wrote.

Wednesday Sept. 9:

* Mexico - CPI - August. Morgan Stanley forecasts a rise of 0.24 percent. "Near-term inflation trending lower; risk to fuel prices in 2010," the firm wrote.

Thursday Sept. 10:

* Peru - Monetary policy meeting. "The central bank will probably maintain the current policies in place and acknowledge better activity," Barclays wrote. The current benchmark rate is 1.25 percent.

* Brazil - IPCA inflation - August. Morgan Stanley forecasts a rise of 0.12 percent in August versus a rise of 0.24 percent the prior month. "Deceleration in food price inflation and housing costs," are the likely reasons for the drop, the firm wrote.

Friday Sept. 11:

* Argentina - CPI - August

* Mexico - industrial production - August. Barclays forecasts a drop of 8.6 percent versus a drop of 10.6 percent in the prior period. "The forecast reflects improvement in U.S. manufacturing and Mexico's car data, consistent with a 2.1 percent month-on-month gain," the firm said. (Reporting by Daniel Bases; Editing by Kenneth Barry and Maureen Bavdek)