LATAM WEEKAHEAD-Mexico likely to show better GDP proxy data

By Daniel Bases

NEW YORK, Oct 25 (Reuters) - The week offers a modest number of economic reports for Latin America, including Mexico's IGAE report, a proxy for gross domestic product, which is expected to show improvement in monthly activity.

According to economists at Barclays Capital, the IGAE report is expected to show a contraction of 6.0 percent for August versus a contraction of 6.87 percent reported in July. The report is due Wednesday.

"The forecast is consistent with a small month-on-month gain but tracks upside risk to our Q3 quarter-on-quarter forecasts," Barclays told clients on Friday.

In central bank news, minutes from meetings in Brazil and Chile are due.

Brazil's central bank left interest rates unchanged for a second straight meeting on Oct. 21. Minutes from the meeting will be released on Thursday.

"Following the neutral statement, BCB should signal no intention to raise rates in the near future," Barclays said.

Chile reports its monetary policy minutes on Wednesday. The bank said on Oct. 20 that it was in no rush to raise interest rates despite signs of economic recovery.

The following will also be watched by investors in Latin America this week:

Monday:

* Brazil - Current account for September. Morgan Stanley forecasts a deficit of $2.9 billion versus a deficit of $800 million in August. "Weaker trade balance and stronger outflow of profits," the bank told clients on Friday.

Wednesday:

* Brazil - Public sector balance for September. Barclays forecasts a deficit of 2.4 billion reais. "Lower legal collection, coupled with strong increase in spending, to pull the result into negative territory for the first time this year," the firm said. Morgan Stanley forecasts a surplus of 2.5 billion reais versus 5 billion reais in the prior period.

* Mexico - Central bank third-quarter inflation report. RBC Capital Markets warned clients there could be upward revisions to 2010 and 2011 CPI forecasts. Morgan Stanley said the key would be to look for any reference to reaction to tax reforms.

Thursday:

* Chile - Industrial production for September. Barclays forecasts a contraction of 4.5 percent versus a 3.8 percent contraction in August. "The forecast assumes payback after a string of strong gains, but remains consistent with solid quarter-on-quarter expansion," the firm said.

(Editing by Kenneth Barry and Diane Craft)