Latin America Economics Update Colombia’s downturn worse than we feared The weaker-than-expected Q1 GDP figure, coupled with signs that Q2 is shaping up to be worse than we had initially thought, has prompted us to revise down our estimate for the fall in Colombian GDP... 19th May 2020 · 2 mins read
Latin America Economics Update Are investors too sanguine on Colombian debt? Colombia’s public debt ratio will rise sharply this year and we disagree with the consensus view that it will fall back from 2021. This is likely to limit any recovery in the Colombian bond market... 14th May 2020 · 3 mins read
Latin America Economics Update Argentina: comparisons with 2001/02 One major difference between Argentina’s current crisis and the historic 2001/02 episode is that the hit to private sector balance sheets should be smaller. So even though the coronavirus will cause a... 11th May 2020 · 4 mins read
Latin America Economics Update Copom set to cut further, Chile’s CB stays the course The Brazilian central bank’s 75bp cut in the Selic rate last night and the dovish tone of the accompanying statement has prompted us to pencil in a further 50bp of cuts (to 2.50%) in the coming months... 7th May 2020 · 3 mins read
Latin America Economics Update Brazil and Mexico set for double-digit contractions The collapse in the confidence surveys in Brazil and Mexico last month point to a contraction in activity that exceeds that experienced in each economy during the Global Financial Crisis. And with... 5th May 2020 · 2 mins read
Latin America Economics Update Colombia cuts rates, more easing in store The statement accompanying the Colombian central bank’s decision to cut the policy rate by 50bp to 3.25% left the door open for more easing. Given the scale of the economic hit that we expect, the... 1st May 2020 · 3 mins read
Latin America Economics Update Latin American banks: where do the risks lie? Latin American banks are generally in good shape, but the sheer scale of the fall in output and limited policy responses to protect incomes in parts of the region mean that the rise in bad loans could... 29th April 2020 · 3 mins read
Latin America Economics Update The economic angle to Brazil’s (latest) political crisis Brazil’s economy is better placed to withstand a twin political and economic crisis than it was during the Dilma impeachment of 2015-16. But the brewing political mess could leave long-lasting damage... 27th April 2020 · 4 mins read
Latin America Economics Update Assessing the impact of low oil prices on Mexico The plunge in oil prices is yet another drag on Mexico’s freefalling economy, and may hasten a move by Pemex to restructure its external debts. The government’s lacklustre response to the economic... 22nd April 2020 · 3 mins read
Latin America Economics Update Five Q&As on Argentina’s restructuring proposal The Argentine government’s aggressive proposal to restructure its international bonds entails over $40bn in debt relief, which would go some way to restoring public debt sustainability. However, there... 17th April 2020 · 3 mins read
Latin America Economics Update Pemex default risks rising Our oil price forecasts are consistent with a 30% drop in Pemex’s revenues this year, which suggests the firm will need additional state support to service its large debts. However, with the... 16th April 2020 · 5 mins read
Latin America Economics Update What more can Chile’s central bank do? With the Central Bank of Chile’s policy rate at its effective lower bound, we think that its next easing measure would be a quantitative easing programme aimed at flattening the long end of the yield... 8th April 2020 · 4 mins read
Latin America Economics Update What do the latest surveys tell us? Last month’s survey data for Brazil and Mexico don’t capture most of the impact of the ramping up of social distancing measures in the second half of March, but they still suggest that both economies... 2nd April 2020 · 2 mins read
Latin America Economics Update Chile cuts rates, more easing in store Chile’s central bank suggested that, having cut its policy rate to 0.5% yesterday, rates will remain at this low level for an extended period of time. But given the scale of the economic hit from the... 1st April 2020 · 3 mins read
Latin America Economics Update Are Latin American policymakers doing enough? Policymakers in Peru and Chile have been quick to introduce economic policy and containment measures in response to the coronavirus, but peers elsewhere – particularly in Brazil and Mexico – have made... 31st March 2020 · 4 mins read
Latin America Economics Update The COVID-19 cost and Brazil’s public debt problem The cost of the coronavirus will push Brazil’s public debt ratio up sharply this year, to about 90% of GDP, and policymakers will have their work cut out to stabilise the debt trajectory in the... 30th March 2020 · 3 mins read
