Latin America Economics Update Trapped in the impossible trinity Policymakers in Latin America face an awkward choice. Either they must fight inflation with stronger currencies but at the expense of a squeeze on domestic manufacturers, or they can limit currency... 24th February 2011 · 1 min read
Latin America Economics Update Venezuelan economy still struggling to recover The Venezuelan economy finally returned to positive annual growth in Q4 last year. But while the recent rally in oil prices has eased the country’s dollar drought and should support GDP growth of 1%... 23rd February 2011 · 1 min read
Latin America Economics Update Nudging up our forecasts for Mexican growth Mexico’s Q4 GDP data (released this afternoon) were stronger than expected. With renewed fiscal stimulus in the US likely to give a further boost to the recovery over the coming quarters, we are... 21st February 2011 · 1 min read
Latin America Economics Update Chilean rates to rise further The Central Bank of Chile (CBC) hiked interest rates by 25bps to 3.5% last night. Growing economic imbalances and the threat of higher inflation mean that rates will rise further over the coming... 17th February 2011 · 1 min read
Latin America Economics Update Brazilian growth remains two-speed It is tempting to attribute the stagnation in Brazilian retail sales in December to recent efforts to curb credit growth but in truth the impact of these measures is unlikely to show up in the data... 15th February 2011 · 1 min read
Latin America Economics Update Peruvian economy carrying plenty of momentum in 2011 Peru released monthly GDP data for December this afternoon which suggest that output increased by 9% last year. With the economy carrying plenty of momentum we are revising up our forecast and now... 15th February 2011 · 1 min read
Latin America Economics Update Peruvian rates edge higher, other measures to be deployed The Central Reserve Bank of Peru (BCRP) hiked interest rates by 25bps to 3.5% last night. With the economy booming and inflation pressures building, further rate hikes will probably follow over the... 11th February 2011 · 1 min read
Latin America Economics Update Brazil's cuts look big but off-balance sheet spending still key Last night’s announcement of budget cuts worth R$50bn (1.3% of GDP) should mean that Brazil’s government meets – or perhaps even betters – its ‘official’ target for the primary budget surplus of 3% of... 10th February 2011 · 1 min read
Latin America Economics Update Inflation still being driven by food and energy prices Data released this morning show that rising global commodity prices continue to be the main driver of inflation in both Brazil and Chile. But while these effects may fade over the course of 2011... 8th February 2011 · 1 min read
Latin America Economics Update Is Mexican manufacturing bucking the trend? The drop in Mexico’s IMEF Manufacturing Index last month stands in stark contrast to the recent strength of industrial surveys elsewhere in the world, notably the US. The good news is that the... 4th February 2011 · 1 min read
Latin America Economics Update Brazil manufacturers squeeze margins to compete The pick-up in January’s PMI suggests that after a torrid second half to 2010, Brazilian manufacturers have enjoyed a decent start to 2011. Unfortunately, it seems that producers have had to squeeze... 1st February 2011 · 1 min read
Latin America Economics Update BANREP turns more hawkish, but rate hikes likely to be gradual The Central Bank of Colombia (BANREP) held interest rates at 3.0% last night, as expected. But the accompanying statement was more hawkish than in previous. There is a risk that interest rates will... 1st February 2011 · 1 min read
Latin America Economics Update Tombini makes his mark The minutes from this month’s meeting of the Brazilian Monetary Policy Committee (COPOM) were unequivocally hawkish and should banish any lingering concerns about a shift in policy priorities under... 28th January 2011 · 1 min read
Latin America Economics Update Rising inflation to be met with unorthodox measures With the notable exception of Mexico, containing inflation remains the immediate challenge for policymakers in Latin America. Although the pick-up in inflation looks set to be driven by food and... 24th January 2011 · 1 min read
Latin America Economics Update Interest rate hikes remain a distant prospect in Mexico As expected, the Central Bank of Mexico (BANXICO) held interest rates at 4.5% this afternoon. Speculation is mounting that rising food prices could trigger a rate hike over the coming months but the... 21st January 2011 · 1 min read
Latin America Economics Update Tombini starts with a hike, attention now turns to fiscal policy Last night, the Brazilian Central Bank (BCB) hiked interest rates by 50bps to 11.25%. Rates will probably be increased by another 50bps at March’s meeting too. But if rumours of a fiscal tightening... 20th January 2011 · 1 min read
