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
Latin America Economics Update Copom dialling down the tightening cycle The communications following the Brazilian central bank meeting yesterday, at which the Selic rate was hiked by 100bp (to 12.75%), confirm that the tightening cycle is nearing an end. But even so... 5th May 2022 · 3 mins read
Latin America Economics Update We expect the Brazilian real to reverse some of its gains The sharp rally in the Brazilian real against the US dollar since the start of the year has shown tentative signs of ending, and we think that it will weaken a bit through the end of 2022. In view of... 14th April 2022 · 2 mins read
Latin America Economics Update Brazil: making sense of the latest surveys Depending on which activity survey you look at, Brazil’s economy either staged a rapid recovery in March or slowed. A comprehensive look at the latest figures suggests that the latter is more likely... 12th April 2022 · 4 mins read
Latin America Economics Update Mexico: the implications of Amlo’s recall referendum Mexican President López Obrador is likely to remain in power after a recall referendum on his position this Sunday, which may embolden him to double down on his interventionist agenda. While a radical... 5th April 2022 · 3 mins read
Latin America Economics Update Argentina: Catch-22 for IMF deal 22 One issue the IMF seems to be glossing over in its latest deal with Argentina (the 22 nd in the country’s history) is that the currency looks overvalued. But the adjustment needed to improve the... 30th March 2022 · 5 mins read
Latin America Economics Update Chile: tightening cycle not yet done and dusted The Monetary Policy Report released by Chile’s central bank today, following on from its 150bp rate increase to 7.00%, suggests that its tightening cycle is winding down to a close. However, we think... 30th March 2022 · 4 mins read
Latin America Economics Update Banxico’s hawkish tilt as Amlo slips up Yesterday’s unanimous vote by Mexico’s central bank to raise the policy rate by 50bp, to 6.50%, came as no surprise since it had already been revealed by President López Obrador (Amlo) earlier in the... 25th March 2022 · 3 mins read
Latin America Economics Update IMF & Argentina: a historical guide to restoring confidence History suggests that for an IMF deal to restore market confidence, a credible shift towards policy tightening which delivers positive economic results, alongside favourable external conditions, is... 23rd March 2022 · 5 mins read
