Latin America Economics Update Mexico and the impact of Trump’s tariffs There’s plenty of uncertainty about whether the tariffs on all US imports from Mexico announced last night by President Trump will be introduced and rise to the full 25%. The impact of the starting... 31st May 2019 · 1 min read
Latin America Economics Update Argentine inflation close to a peak Argentine inflation is close to a peak and should ease in the coming quarters. But bringing inflation down to single digits will require a reduction in wage indexation, improvements in the central... 28th May 2019 · 1 min read
Latin America Economics Update Revising down our Mexico growth forecast The carryover from the weak Q1 Mexican GDP growth figure has prompted us to revise down our growth forecast for this year to 1.8% (our 2020 forecast is unchanged at 1.5%). Slow growth increases the... 24th May 2019 · 1 min read
Latin America Economics Update Further weakness in store for the Colombian peso The Colombian peso has been the worst performing EM currency so far this month and we expect it to fall by another 8% or so against the dollar by year-end. The resulting rise in inflation is likely to... 23rd May 2019 · 1 min read
Latin America Economics Update Argentina: CFK shakes up the election The decision by populist and anti-IMF former president, Cristina Fernández de Kirchner, to run for vice president in October’s election (with a more moderate Peronist at the top of the ticket) has... 20th May 2019 · 1 min read
Latin America Economics Update What next for Brazilian inflation? Brazilian inflation has probably now reached a peak and the headline rate should fall below the central bank’s target in the coming months. With core inflation still extremely soft, the central bank... 14th May 2019 · 1 min read
Latin America Economics Update Brazil’s pension reform: entering choppy waters… Opposition to Brazil’s pension reform has, so far, been limited to fairly minor components of the bill. But it will face more substantial resistance in the coming months. Ultimately, our sense is that... 9th May 2019 · 1 min read
Latin America Economics Update Brazilian central bank looking through inflation rise Copom’s statement from last night’s meeting highlighted that policymakers are not troubled at all by the recent jump in inflation and, rightly in our view, see it as temporary. If anything, they are... 9th May 2019 · 1 min read
Latin America Economics Update Colombia: judging the impact of the Venezuelan crisis The collapse of Venezuela’s economy has placed strains on Colombia’s social welfare system but, if anything, it is actually likely to have a small positive impact on Colombian GDP growth. 7th May 2019 · 1 min read
Latin America Economics Update Argentina: revisiting sovereign debt risks The growing possibility of a lurch to the left in Argentina’s presidential election in October has rekindled sovereign default fears. While the government’s FX debt repayment schedule in the immediate... 1st May 2019 · 1 min read
Latin America Economics Update Argentina: market sell-off intensifies election risks The broad-based sell-off in Argentine assets over the past week or so, triggered by growing political risks, has resulted in a sharp tightening of financial conditions, which will weigh on economic... 29th April 2019 · 1 min read
Latin America Economics Update Rout in Argentine markets to trigger policy response Argentine policymakers are likely to have been spooked by the rout in local markets in recent days, and the experience of the past few weeks suggests that they will be tempted to respond with more... 25th April 2019 · 1 min read
Latin America Economics Update Argentine policymakers beginning to panic The decision by Argentina’s central bank to limit the extent to which the nominal exchange rate will be allowed to weaken this year raises the risk that the peso becomes overvalued. Meanwhile, the... 17th April 2019 · 1 min read
Latin America Economics Update BCRA tightening a double-edged sword for the ARS The Argentine central bank’s pledges to keep monetary policy tighter for longer have helped to stave off a run on the currency in recent weeks. But by keeping the economy weak ahead of October’s... 10th April 2019 · 1 min read
Latin America Economics Update Mexican oil production likely to fall further The best that Mexico’s state-owned oil company, Pemex, can hope for in the coming years is a slower pace of decline in crude production. Many of its shallow oil fields are maturing and the government... 2nd April 2019 · 1 min read
Latin America Economics Update Chile’s central bank signals lower for longer The statement accompanying the Chilean central bank’s decision to hold its policy rate at 3.00% on Friday night signalled that rates are likely to stay on hold for longer than they had previously... 1st April 2019 · 1 min read
