Latin America Economics Update Weaker Mexican inflation to drive more Banxico cuts Headline inflation in Mexico looks set to fall towards 3% over the coming months as both food and core inflation soften. We think that will give Banxico scope to cut its policy rate by an additional... 18th August 2020 · 3 mins read
Latin America Economics Update Colombia: fledgling recovery may already be stalling The 14.9% q/q slump in Colombian GDP in Q2 is not quite there among the worst outturns in the EM world, but it’s not far off. More worryingly, mobility data suggest that the nascent economic recovery... 17th August 2020 · 3 mins read
Latin America Economics Update What Mexico’s current account means for the peso We expect that Mexico’s current account deficit will narrow, and could even turn to a small surplus, over the rest of the year as a strong goods surplus outweighs weaker remittance inflows. That... 13th August 2020 · 2 mins read
Latin America Economics Update Brazil: low rates here to stay The 25bp cut in the Selic rate, to 2.00%, at last night’s Brazilian central bank meeting probably marks the last reduction in the cycle, but the accompanying statement supports our view that rates... 6th August 2020 · 3 mins read
Latin America Economics Update Chile’s pension bill: the economic & market impact Reforms in Chile that allow households to withdraw some of their pension savings may help to boost the economic recovery over the next year. But the way in which the reform was passed adds to the... 29th July 2020 · 3 mins read
Latin America Economics Update Brazil’s tax reform push a step in the right direction The push by Brazil’s government to change the tax system provides a welcome sign that the government’s reform agenda is still progressing, despite the political infighting caused by the handling of... 22nd July 2020 · 3 mins read
Latin America Economics Update Industry weighing on Mexico’s economy The struggles in Mexico’s industrial sector suggests that GDP fell by around 20% q/q in Q2. And the weak prospects for the sector will dampen Mexico’s economic recovery over the coming quarters. 15th July 2020 · 3 mins read
Latin America Economics Update Ecuador: breathing room, but long fight still ahead The debt restructuring deal provisionally agreed between Ecuador’s government and a group of its creditors would, if implemented, ease near-term pressures on the public finances. But we are more... 13th July 2020 · 3 mins read
Latin America Economics Update More evidence of major fiscal damage After blowing out in April, budget deficits in Latin America remained wide in May. And while a pick-up in economic activity should help tax revenues to recover and social welfare spending to ease over... 8th July 2020 · 3 mins read
Latin America Economics Update Taking stock of the recovery in Latin America The latest surveys and high-frequency data suggest that Latin America’s economic recovery finally started to firm up in June. But it is still lagging other EM regions – and Chile’s recovery is yet to... 6th July 2020 · 2 mins read
Latin America Economics Update Colombia: still room for another few rate cuts The decision by the Colombian central bank to slow the pace of easing from 50bp to 25bp at last night’s meeting suggests that the rate-cutting cycle is approaching its conclusion. We remain... 1st July 2020 · 3 mins read
Latin America Economics Update What next for monetary policy in Peru? Peru’s economy appears to be suffering one of the largest economic hits of any country from the coronavirus, which is likely to spur further policy easing. With short-term interest rates essentially... 18th June 2020 · 3 mins read
Latin America Economics Update Copom tempers hopes for further large rate cuts The statement from yesterday’s Brazilian central bank meeting poured cold water on expectations in the market that the Selic rate would be cut further from its current level of 2.25% to as low as 1.00... 18th June 2020 · 3 mins read
Latin America Economics Update Chile central bank delves into unconventional toolbox The decision by Chile’s central bank to leave its policy interest rate unchanged at 0.50% was accompanied by a statement which appeared to unveil a QE programme. The finer details will be fleshed out... 17th June 2020 · 3 mins read
Latin America Economics Update Latin America’s lockdown conundrum Most policymakers in Latin America are easing lockdowns even though the region is now the epicentre of the coronavirus pandemic. This may be less economically damaging than keeping stringent... 16th June 2020 · 3 mins read
Latin America Economics Update Finding the floor for rates in Latin America Our Taylor Rules suggest that monetary easing cycles have further to run in Brazil, Mexico and Colombia, and we have pencilled in additional interest rate cuts in all three countries. Moreover... 11th June 2020 · 5 mins read
