Latin America Economics Update Brazil’s drought adds to inflation and fiscal risks Brazil’s drought is getting worse and the impact on hydropower production and electricity tariffs will result in higher inflation than we’d previously thought. Fiscal risks could also intensify if the... 1st September 2021 · 3 mins read
Latin America Economics Update Chile’s central bank stepping on the brakes The surprise 75bp interest rate hike by Chile’s central bank late on Tuesday (which took the policy rate to 1.50%) underscores policymakers’ concerns about the inflation outlook. Our forecasts for the... 1st September 2021 · 3 mins read
Latin America Economics Update Brazil: could a savings drawdown lift the recovery? We estimate that Brazilian households have ‘excess’ savings worth around 6% of GDP resulting from the pandemic. These should help to cushion consumer spending in the face of headwinds caused by rising... 26th August 2021 · 3 mins read
Latin America Economics Colombia: BanRep to hike despite Q2 GDP drop The sharper-than-expected 2.4% q/q fall in Colombia’s GDP in Q2 was largely due to protest-related disruption in May and masked a strong rebound in output at the end of the quarter. The economic... 18th August 2021 · 3 mins read
Latin America Economics Update Banxico’s tightening cycle progressing slowly Mexico’s central bank hiked interest rates by 25bp, to 4.50%, yesterday but the split vote suggests that the tightening cycle will continue to proceed slowly despite the growing inflation risks. This... 13th August 2021 · 3 mins read
Latin America Economics Update What our commodity forecasts mean for Latin America We expect that most commodity prices will come off the boil, which will weigh on recoveries across Latin America, particularly in Peru and Chile. While the brightening domestic picture will boost... 9th August 2021 · 3 mins read
Latin America Economics Update Brazil: further hikes in store as inflation concerns build The hawkish statement accompanying yesterday’s 100bp rate hike by the Brazilian central bank (to 5.25%) means that the Selic rate will increase further than we had anticipated. We now expect it to be... 5th August 2021 · 3 mins read
Latin America Economics Chile: start of a long but gradual tightening cycle Chile’s central bank fired the starting gun on a gradual tightening cycle yesterday as it hiked its policy rate by 25bp, to 0.75%. While it signalled that monetary policy will remain accommodative... 15th July 2021 · 3 mins read
Latin America Economics Update Peru: Lessons from Humala’s presidency Peru’s president-in-waiting Pedro Castillo seems more moderate than many initially feared, which bears a striking resemblance to former leader Ollanta Humala. The latter’s tenure suggests that... 1st July 2021 · 5 mins read
Latin America Economics Update Banxico: surprise hike a sign of things to come The surprise 25bp rate hike by Mexico’s central bank (to 4.25%) suggests that its reaction function is less dovish that we had expected, as it is now reacting to quell high inflation. With the... 25th June 2021 · 3 mins read
Latin America Economics Update Argentina’s NT outlook not as dire as many think Argentina’s GDP expanded by a stronger-than-expected 2.6% q/q in Q1 and, while the recent third virus wave has dragged down activity in Q2, we are sticking with our above-consensus forecast of 8%... 24th June 2021 · 4 mins read
Latin America Economics Update A deep dive into Mexican inflation Headline Mexican inflation has now peaked and will drop back within Banxico’s 2-4% target range as the earlier spike in fuel inflation unwinds. In contrast, we expect that core inflation will continue... 21st June 2021 · 5 mins read
Latin America Economics Update Brazil: Copom’s inflation worries growing The hawkish statement from the Brazilian central bank meeting (at which the Selic rate was raised by 75bp to 4.25%) indicates that policymakers are more confident in the economic recovery but also... 17th June 2021 · 3 mins read
Latin America Economics Update A fresh look at Chile’s virus and vaccine trends Chile’s renewed lockdown measures provide further evidence that its rapid vaccination programme has a lot further to run to quash the virus. The good news is that the economy seems resilient to... 15th June 2021 · 5 mins read
Latin America Economics Update Revising up our Brazil growth forecast The latest data suggest that Brazil’s economy has been much more resilient to the latest virus waves than we had anticipated and, as a result, we’re revising up our GDP growth forecast for this year... 3rd June 2021 · 5 mins read
Latin America Economics Update Five key questions on Mexico’s midterm elections Sunday’s midterm elections in Mexico are widely seen as a referendum on President López Obrador’s tenure, and a strong result for his coalition could embolden him to pursue more interventionist... 2nd June 2021 · 4 mins read
