Latin America Economics Update New “superminister” no saviour for Argentina’s woes The appointment of Sergio Massa as head of Argentina’s newly-created economic “superministry” provides some hope that the government will try to stick to its latest IMF deal. But it will be a major... 5th August 2022 · 7 mins read
Latin America Economics Update Copom’s tightening cycle drawing to a close The statement to yesterday’s Brazilian central bank meeting, at which the Selic rate was hiked by 50bp to 13.75%, made clear that Copom is more confident that inflation will fall back and also more... 4th August 2022 · 3 mins read
Latin America Economics We think the Mexican peso will fall further We expect the Mexican peso to fall further against the US dollar amid mounting external headwinds. In view of the wider interest, we are also sending this FX Markets Update to clients of our Latin... 15th July 2022 · 3 mins read
Latin America Economics Update Inflation near a peak, but little comfort for central banks Inflation rose to multi-decade highs in much of Latin America last month and, while it should peak in Q3, headline rates will remain uncomfortably high for some time. Central banks in the region... 14th July 2022 · 4 mins read
Latin America Economics Update Chile’s economy heading into choppy waters Having defied gravity in 2021, this year is shaping up to be much tougher for Chile’s economy and we think that the economy will contract in both Q3 and Q4. Despite the weakening growth outlook, high... 5th July 2022 · 2 mins read
Latin America Economics Update Goodbye Guzmán, hello crisis The news that Argentine economy minister, Martín Guzmán, resigned over the weekend points to growing influence of the Kirchner faction of the government. From an economic perspective, this is likely... 4th July 2022 · 2 mins read
Latin America Economics Update Banxico’s tightening cycle shifts up a gear The Mexican central bank’s shift to a 75bp interest rate hike yesterday (to 7.75%) and the hawkish language in the accompanying statement make another 75bp move at the next meeting in August a done... 24th June 2022 · 3 mins read
Latin America Economics Update Copom: revisiting the 2015-16 playbook The latest Brazilian central bank communications give a strong signal that, when Copom stops hiking interest rates, it will act in a similar way to the end of the last tightening cycle in 2015. The... 23rd June 2022 · 5 mins read
Latin America Economics Update The Codelco strike threat, Chile and the copper price A threatened strike at Chile’s copper giant, Codelco, could knock as much as 0.3%-pts off quarterly GDP growth for every week that workers are on strike and worsen the country’s balance of payments... 21st June 2022 · 3 mins read
Latin America Economics Update Colombia: First thoughts on Petro’s victory Left-wing Gustavo Petro’s win in the second round of Colombia’s presidential election is likely to spook investors and trigger a sell-off in the country’s financial markets. We suspect that Petro will... 20th June 2022 · 4 mins read
Latin America Economics Update Inflation & fiscal risks pushing Copom to tighten further While the Brazilian central bank’s tightening cycle is drawing to a close, the statement accompanying yesterday’s 50bp increase in the Selic rate (to 13.25%) left the door open to additional hikes... 16th June 2022 · 3 mins read
Latin America Economics Update Chile’s current account deficit flashing red Chile is likely to run a current account deficit of 7% of GDP this year, the widest since 1985. Worryingly, this deficit is being increasingly funded by volatile portfolio inflows, making the economy... 13th June 2022 · 3 mins read
Latin America Economics Update Chile: tightening cycle will go further than most expect The guidance in the Monetary Policy Report released by Chile’s central bank today, following on from its 75bp rate hike to 9.00% yesterday, suggests that the tightening cycle has a little further to... 8th June 2022 · 3 mins read
Latin America Economics Update Brazil’s economy showing signs of life The solid 1.0% q/q rise in Brazil’s GDP in Q1, alongside the strength of the recent survey data, reinforce our view that the economy will fare better than most expect this year. However, we still... 6th June 2022 · 2 mins read
Latin America Economics Update Colombia’s economy to beat expectations this year The solid 1.0% q/q rise in Colombia’s GDP in Q1 suggests the economy came through the Omicron virus wave in good shape and, given the recent surge in oil prices, we expect above-consensus growth of 6... 17th May 2022 · 2 mins read
Latin America Economics Update Brazil’s tightening cycle not derailing credit growth Brazil’s central bank has undertaken the most aggressive tightening cycle of any major economy over the past year, but there has been surprisingly little impact on bank lending. And while we do expect... 12th May 2022 · 4 mins read
