Filtered by Subscriptions: Latin America Economics Use setting Latin America Economics
The Shape of the Fractured World in 2025 The share of the fracturing global economy that is accounted for by China and its geopolitical allies contracted in 2024, leaving it under a third the size of the US bloc at the start of 2025. This fall was in part …
17th January 2025
Mexico is arguably the most vulnerable economy to US trade protectionism. This in-depth analysis maps out economic and financial linkages between Mexico and its northern neighbour to provide a clearer sense of how tariffs would affect the economy and how …
15th January 2025
If Donald Trump were to impose a universal 10% tariff on US imports, we wouldn’t expect widespread reshoring of manufacturing production back to the US. And if it were accompanied by a 60% tariff on Chinese imports, the main beneficiaries would be other …
14th January 2025
Donald Trump’s second term could redraw the global geopolitical map. A sustainable “Grand Bargain” with China, warmer relations with Russia, or a breakdown in the relationship between the US and its traditional allies could each reshape supply chains and …
7th January 2025
We discussed the global impact of higher tariffs in a Drop-In on Tuesday, 26th November. Click here to watch the 20-minute online briefing. In this Focus, we construct a framework to explore the channels through which an import tariff works, which we use …
25th November 2024
Several EMs have reached provisional agreements with creditors to restructure their sovereign debts in recent months, including Zambia, Ukraine, Sri Lanka and Ghana. In principle, restructurings should pave the way for improved fiscal positions, stronger …
17th October 2024
Housing inflation has become an increasingly important driver of core services inflation in Mexico – a key concern of the central bank, Banxico. And we think that robust household income growth and a lack of supply of dwellings will keep housing and, by …
13th August 2024
This page brings together our analysis of how Donald Trump's return to the White House will affect the outlook for emerging economies. Use the Table of Contents on the right to navigate. All of our analysis on the election, including the implications for …
28th June 2024
All the signs suggest that a second Trump administration would take a more protectionist approach to trade. Export demand in Mexico, East Asia and ASEAN would be particularly hard hit by a universal US import tariff or a dollar devaluation, and those …
29th April 2024
We hosted an online briefing to discuss EM financial risks in more detail. Watch the recording here . Our risk indicators are presented as an interactive EM dashboard on our website here . The past few years have sharpened investors’ focus on assessing …
20th March 2024
The impact of a second Trump presidency on Mexico’s economy would depend to a large extent on whether the USMCA deal remains intact or Mexico finds itself subject to US import tariffs. If the latter, Mexico would be one of the most affected EMs. And even …
12th March 2024
Chile is frequently identified as one of the main beneficiaries of global efforts to put economies on a greener footing, but we doubt that the country will reap the full benefits of this trend. Chile is likely to struggle to substantially raise copper and …
6th February 2024
Brazil’s economy and financial markets have provided a positive surprise over the past 12-18 months. This Focus answers five key questions that will determine whether 2024 will be chalked up as a success too. The short point is that we think sentiment now …
24th January 2024
The optimism about Mexico’s economic prospects from the “nearshoring” of supply chains looks overdone in our view. Sectors where Mexico is already well established, such as autos and some electronics products, stand to benefit. But without major reforms …
8th January 2024
Fiscal risks in Latin America have largely been out of the spotlight over the past year, but we think that public debt concerns will build over the coming years. Sovereign defaults seem more likely than not over the next few years in a handful of …
22nd November 2023
During the past decade, the global economy has transitioned out of an era in which globalisation was the key driver of economic and financial relationships into one shaped by geopolitics. Previously, most governments had believed that closer economic …
16th November 2023
Brazil’s monetary easing cycle will probably lead to higher spending in interest rate sensitive areas, such as furniture and appliances, autos and construction materials. But that won’t be enough to prevent overall GDP growth from slowing sharply – and by …
3rd October 2023
History suggests that dollarisation, which is at the heart of Argentine presidential candidate Javier Milei’s policy platform, is a surefire way to get inflation under control. But whether this translates into broader macro stability would hinge on …
30th August 2023
The latest Pemex capital injection underscores that Mexico’s President López Obrador is more likely to lean towards providing a sovereign debt guarantee (either implicit or explicit) to deal with the company’s financial problems. But with a less …
1st August 2023
The large macroeconomic imbalances that built up during Chile’s post-pandemic recovery have eased substantially, which is likely to prompt the central bank to deliver more rate cuts than almost any other EM central bank over the next couple of years. We …
17th July 2023
The slowdown that we expect in Brazil’s economy should take some steam out of the labour market, but it looks like it won’t be enough to stop wages from rising at a rapid pace. This appears to be a bigger risk to the inflation outlook than the fiscal …
1st February 2023
Brazil’s economy has a deep-seated problem of low productivity growth and it’s hard to see either presidential candidate undertaking the reforms needed to lift investment, strengthen competitive forces and tackle skills shortages. As a result, with the …
28th October 2022
The credibility of Brazil’s spending cap – the country’s key fiscal anchor – has been seriously undermined by tweaks and workarounds since the start of the pandemic. And it looks likely that the cap will be weakened further after October’s presidential …
21st September 2022
While Luiz Inácio Lula da Silva (better known simply as Lula), the front-runner in Brazil’s presidential race, has been vague about his policy stance, one common theme from his campaign is nostalgia for his previous presidency of 2003-10. The experience …
14th September 2022
Colombia’s upcoming presidential election could result in the country’s first left-wing government in recent decades, headed by Gustavo Petro. While he is unlikely to be as radical as many expect, Petro’s policies would lead to higher public debt, higher …
26th May 2022
We expect that falls in commodity prices will cause current account positions to worsen across the region this year. While external positions will remain secure in most major Latin American economies, those in Colombia and Chile are an underappreciated …
4th February 2022
Suggestions that Brazil’s government will raise welfare spending – and circumvent the spending cap in doing so – add to the evidence that there’s little appetite for the long-term fiscal squeeze needed to stabilise the public finances. Taken together with …
20th October 2021
The pandemic appears to be accelerating a political trend towards populism in Latin America. While there is a lot of uncertainty about how this might play out, it generally points towards loose fiscal policy and greater state intervention across the …
5th August 2021
We suspect that Argentina’s government and the IMF will thrash out a new deal, the 22 nd in their history, but we doubt that this will lead to the sustained turnaround in policymaking that is needed to put public debt onto a sustainable path. The upshot …
7th April 2021
The Brazilian central bank’s 75bp hike in the Selic rate (to 2.75%) and hawkish statement point to a front-loaded tightening cycle in the coming months. We now expect a further 200bp of hikes (to 4.75%) over the next three meetings. But we think the cycle …
18th March 2021
We think that the Mexican central bank’s (Banxico’s) reaction function will gradually tilt towards tolerating higher inflation. As a result, we think that interest rates in Mexico will stay low for several years, perhaps until 2024, while most analysts …
14th January 2021
Pressure for loose fiscal policy in Brazil is likely to persist and we think that the spending cap will be cast aside in the coming years. The government is already testing the water with creative accounting to get around spending limits and this is …
6th October 2020
It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government policies, many economies should be able more or less to …
29th June 2020
The effects of the coronavirus will push Argentina's economy into an even deeper recession and make the government more tempted to unilaterally halt payments on its international bonds. While we think that an amicably negotiated solution to Argentina's …
7th April 2020
Fears about the coronavirus have weighed on oil prices and clouded the near-term outlook for Colombia’s economy. But even if – as we expect - the virus is brought under control soon and oil prices recover, growth will probably be a lot weaker than most …
24th February 2020
The prevailing view that this will be the year when Brazil’s recovery finally shifts up a gear looks overly optimistic. We expect that GDP growth will come in at just 1.5% over 2020, which leaves us close to the bottom of the consensus range. ‘This year …
14th January 2020
Brazil’s pension reform bill should help to stabilise the public finances and lift a dark cloud over the outlook. The government has a long to-do list of further fiscal reforms, although the political situation suggests that some of these will be delayed, …
22nd October 2019
