The activity data from Latin America released over the past week or so suggest that, having come to a standstill in Q4, there was a strong rebound in growth in Q1 on the back of robust services activity. But the strength in services activity is keeping underlying inflation uncomfortably high, which supports our above consensus view on interest rates. Elsewhere, Panamanians head to the polls on Sunday and whoever wins the election will face big economic and fiscal challenges. Finally, one of the key takeaways from our latest quarterly EM Financial Risk Indicators published this week is that fiscal risks across Latin America are rising.
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