Latin America Economics Update Pulling down our currency forecasts We expected 2018 to be a year of weakness for Latin American currencies, but the recent falls against the dollar have pushed a number of exchange rates through our year-end forecasts already. We’re... 25th May 2018 · 1 min read
Latin America Economics Update Argentina not (yet) facing a public debt crisis Despite the near-25% drop in the peso against the dollar so far this year, Argentina is not yet facing a sovereign debt crisis. The public debt ratio will rise this year, but not to an alarming level... 23rd May 2018 · 1 min read
Latin America Economics Update Maduro 2.0: messy debt default on the cards The victory for Nicolás Maduro in Venezuela’s presidential election paves the way for an escalation of US sanctions – possibly on the oil sector – and a messy sovereign debt default and restructuring... 21st May 2018 · 1 min read
Latin America Economics Update What would a Duque presidency mean for Colombia? Centre-right candidate Iván Duque looks set to win the first round of Colombia’s presidential election next week, and if he also prevails in the second round – as seems likely – he will inherit an... 18th May 2018 · 1 min read
Latin America Economics Update How can Argentina get out of its crisis? The lesson from EMs that have been forced to turn to the IMF for financial support in the past is that Argentina will need a combination of front-loaded fiscal tightening, reforms at the central bank... 18th May 2018 · 1 min read
Latin America Economics Update Does the Argentine peso have much further to fall? Following its near-20% drop so far this year, Argentina’s real effective exchange rate looks pretty close to its ‘fair’ value – we estimate that it probably needs to fall by a modest 5% or so from... 17th May 2018 · 1 min read
Latin America Economics Update Argentina: lessons from 2001/02 There are some similarities between Argentina’s current crisis and 2001/02 crisis. But there are also critical differences, not least the fact that the peso is now free-floating and the authorities... 15th May 2018 · 1 min read
Latin America Economics Update Why has Brazilian inflation stayed so low? The recent weakness of Brazilian inflation appears to be due in part to persistently weak food inflation, but more importantly it looks like the large output gap in the economy has dragged down core... 11th May 2018 · 1 min read
Latin America Economics Update IMF or not – Argentina to fall into recession this year The news that Argentina has started talks with the IMF over a full-blown bailout has masked the fact that – deal or no deal – the economy is likely to fall into recession this year. We now expect GDP... 10th May 2018 · 1 min read
Latin America Economics Update Argentina and the IMF: what happens next? The announcement yesterday that Argentina will seek an IMF deal has brought some relief to the peso, but it’s far from guaranteed that an agreement will be reached. More generally, talk of an IMF deal... 9th May 2018 · 1 min read
Latin America Economics Update BCRA rate hike may finally provide a floor for the peso Today’s 675bp interest rate hike by the Argentine central bank, the third emergency hike in a week, finally seems to have brought some support to the currency. Evidence from other EM central banks... 4th May 2018 · 1 min read
Latin America Economics Update Nafta 2.0: what’s on the table? Following intensive talks last month, a preliminary new Nafta deal appears to be within reach. While it could still struggle to pass through legislatures in each country, the deal that looks to be on... 3rd May 2018 · 1 min read
Latin America Economics Update Emergency rate hike fails to shore up Argentine peso The Argentine central bank’s interest rate hike at an unscheduled meeting on Friday has provided little relief for the peso, which is down by another 2.5% against the dollar today. Against a backdrop... 2nd May 2018 · 1 min read
Latin America Economics Update Time to turn bullish on Mexico? The outlook for Mexico’s economy is, despite worries over Nafta renegotiations and an Andrés Manuel López Obrador presidency, brighter than many seem to think. We’ve revised up our forecasts and now... 1st May 2018 · 1 min read
Latin America Economics Update Colombia’s easing cycle probably at an end The decision by Colombia’s central bank to cut its policy interest rate on Friday night by 25bp (to 4.25%) probably marks the last move in the easing cycle. We expect the policy rate to be left... 30th April 2018 · 1 min read
Latin America Economics Update What’s behind the weakness in the real? The sharp drop in the Brazilian real over the past month has, in our view, been driven more by local developments – including growing uncertainty over the outcome of October’s elections – than it has... 25th April 2018 · 1 min read
