Filtered by Subscriptions: Latin America Economics Use setting Latin America Economics
It’s still too soon to say how next year’s presidential elections in Brazil will pan out, but it’s not impossible to see how voters might return an economic populist to the Planalto. If so, there are good reasons to think that the economic and market …
25th July 2017
Mexican inflation remained unchanged in the first half of July which, combined with the latest activity data suggesting that GDP growth slowed in Q2, reinforces our view that Banxico’s tightening cycle is over. … Mexico Bi-Weekly CPI (Jul.) & IGAE …
24th July 2017
The Argentine peso has been the worst-performing EM currency over the past month, and we think it has further to fall. Our forecast is for it to weaken by another 10% against the dollar to 19/$ by end-18 (from 17.2/$ currently). This is a particular …
21st July 2017
Yesterday’s referendum organised by Venezuela’s opposition-controlled National Assembly delivered a resounding defeat to the government, but the vote was unofficial and changes little in practice. Instead, the more important news in recent days has come …
17th July 2017
Peruvian economic activity rebounded strongly in May as the effects of severe flooding at the start of the year started to fade and we expect the recovery to continue over the coming months. … Peru Economic Activity …
14th July 2017
Peru’s central bank cut its policy interest rate by another 25bp, to 3.75%, and we expect at least one further quarter point reduction this year. Elsewhere, the Central Bank of Chile left its policy rate on hold at 2.50% for a second month, but we think …
Around half of the drop in Brazilian inflation over the past year has been driven by a collapse in food inflation, which is now close to bottoming out. But there is also growing evidence that the recession of the past couple of years is starting to weigh …
13th July 2017
We’ve argued for some time that the debate around monetary policy in Mexico would shift from tightening to loosening over the second half of this year. While the potential for market volatility in the run-up to next year’s presidential election may cause …
Mexican industrial production grew by a below-consensus 0.1% m/m in May and, as a result, industry probably broadly stagnated over Q2 as a whole. … Mexico Industrial Production …
12th July 2017
The publication of a national consumer price index by Argentina’s statistics office is a further step towards overhauling its previously discredited inflation data. The short back series limits its use, but the observations we do have broadly corroborate …
The economic surveys in Brazil have fallen since the crisis that has engulfed President Temer’s administration erupted in May, but the hard activity data do not yet point to a sharp downturn in the economy. It’s possible that this could change in time, …
11th July 2017
Mexican inflation rose further above target in June, but there are signs in the breakdown that it is close to peaking. Meanwhile, data also released today showed that inflation in both Brazil and Chile fell sharply last month, reinforcing the case for …
7th July 2017
The second consecutive m/m expansion in the Chilean IMACEC economic activity index suggests that, after a dire Q1, GDP growth probably picked up in Q2. We think the economy should continue to recover over the second half of the year. … Chile IMACEC …
5th July 2017
The stronger-than-expected 0.8% m/m gain in Brazilian industrial production in May, coupled with large upward revisions to April’s data, suggests that the sector may have made a modest positive contribution to GDP growth in Q2. … Brazil Industrial …
4th July 2017
Following two years of recession, Latin America’s economy has shown signs of recovery since the start of this year. And, while political problems are never far from the headlines, we expect economic conditions to continue improving over the coming …
3rd July 2017
The decision by Colombia’s central bank to step up the pace of easing caught the consensus off guard, but supports our view that the policy rate will be cut by more than most expect this year. We remain comfortable with our forecast for it fall to 4.50% …
There is little evidence that the inversion of Mexico’s government bond yield curve means a recession is imminent. But it chimes with our view that economic growth is likely to soften over the remainder of this year, as well as with our forecast for cuts …
30th June 2017
The decision to lower Brazil’s inflation target from 4.5% currently to 4.25% in 2019 and 4.00% in 2020 is clearly a step in the right direction, but it’s worth bearing in mind that inflation targets are only as effective as the central bank’s will to meet …
29th June 2017
Despite the crisis that has engulfed his administration, Brazil’s president, Michel Temer, is managing to cling on to office and there is now a reasonable chance that he serves out his full term to 2018. Mr. Temer has now been formally charged with …
28th June 2017
The sharp drop in Argentine inflation to an 18-month low in May is likely to prompt the central bank to shift into easing mode over the coming quarters. But with core inflation likely to be slow to fall back, we think interest rate cuts will be more …
23rd June 2017
The drop in Brazilian inflation in the first half of June to a fresh decade-low of 3.5% y/y, is Brazilian inflation has fallen below the BCB’s central target for the first time in almost seven years. We expect it to fall further over the coming months, …
The rise in Mexican inflation in the first half of June probably seals the deal for another 25bp hike in the central bank’s policy interest rate, to 7.00%, later today. But there are also signs that inflation is now close to peaking. … Mexico Bi-Weekly …
22nd June 2017
The stronger-than-expected 1.1% q/q rise in Argentine GDP in Q1 was driven by a pick-up in domestic demand, which is likely to have been the key beneficiary of looser fiscal policy ahead of October’s legislative elections. We expect the economy to …
Financial markets in Brazil sold off yesterday following the decision by a Senate Committee to reject the government’s labour reform bill, while the stock market in Argentina has dropped today after the surprise decision by MSCI not to upgrade it to the …
21st June 2017
If Brazil’s pension reforms were to collapse, the immediate impact on the economy would be determined by the knock-on effects to broader financial conditions. Over the longer term, we estimate that a failure to pass pension reform will result in …
19th June 2017
Chile’s central bank left its policy interest rate unchanged at 2.50% following its latest MPC meeting, but with inflation set to remain below target and no sign of a turnaround in the economy, we expect rates to fall to 2.00% this year. This is below …
16th June 2017
Peru’s economy weakened further at the start of Q2, but with the government planning a major fiscal stimulus to offset the impact of severe flooding earlier this year, we expect growth to rebound over the coming months. … Peru Economic Activity …
15th June 2017
Latin America’s economy finally returned to growth in Q1 and the latest data suggest that the recovery continued in Q2. While domestic political developments are a key downside risk to the outlook, we expect the recovery to strengthen in the coming …
14th June 2017
The 0.3% m/m fall in Mexican industrial production in April underlines the fact that, even if the decent growth in the manufacturing sector continues, persistent weakness in mining output means industry as a whole is unlikely to add much to GDP growth …
9th June 2017
The collapse in Brazilian inflation to a fresh decade low of 3.6% y/y in May paves the way for further, albeit smaller, cuts in the Selic interest rate in the coming quarters. Despite the ongoing political uncertainty, we are sticking to our view for the …
Peru’s central bank unexpectedly left its policy interest rate unchanged at 4.00%, but the accompanying statement hinted at further easing and we think additional rate cuts are likely. We expect the policy rate to ultimately fall to 3.50% over the coming …
Mexican inflation rose further above target in May and, while we expect another 25bp hike in the central bank’s policy interest rate later this month, both inflation and interest rates are probably close to peaking. Meanwhile, headline inflation in Chile …
8th June 2017
Brazil’s electoral court has reconvened this week to rule on whether illegal campaign donations made during the 2014 presidential election invalidate the Rousseff-Temer ticket. In this Update, we answer six key questions, including what it might mean for …
6th June 2017
The deepening crisis in Venezuela could have significant spillovers to some Central American and Caribbean countries such as Nicaragua and Cuba. But the impact on larger countries in the region, including Brazil, Argentina and neighbouring Colombia, is …
Having contracted in February and March on the back of a copper mine strike, Chilean economic activity returned to growth in April and we think the economy should continue to recover over the coming months. However, the weak start to the year means that …
5th June 2017
Survey data from Mexico strengthened markedly in May and are now generally back to their levels prior to Trump’s election victory in November. Elsewhere, the latest survey data from Brazil continue to paint a picture of gradual economic recovery. … Mexico …
2nd June 2017
The 0.6% m/m increase in Brazilian industrial production was better than expected, but only partly reverses the steep drop recorded in March. As things stand, it is difficult to envisage the sector making another significant contribution to GDP growth in …
The 1.0% q/q rise in first quarter GDP means that, after having contracted for eight consecutive quarters, Brazil has finally exited recession. While our GDP forecast for this year is still above consensus, the recovery will be stop-start. The monthly …
1st June 2017
Brazil’s financial markets sold off sharply in the immediate aftermath of the latest corruption allegations against President Temer, with equities, the currency and bonds all coming under pressure. Markets have since stabilised, but one notable …
26th May 2017
The economic data from Latin America have continued to improve over the past month, but this has been overshadowed by developments on the political front. The scandal that has engulfed Brazil’s government has taken centre stage and, while there are still …
25th May 2017
Mexican inflation continued its upward trend in the first half of May, hitting an eight-year high of 6.2% y/y, but the recent stability of the peso means it probably doesn’t have much further to rise. … Mexico Bi-Weekly CPI …
24th May 2017
The outlook for Latin America is improving and we expect economic growth to accelerate over the next year. The latest political crisis to engulf Brazil has cast fresh doubts over the outlook there but the early signs suggest that this is unlikely to …
23rd May 2017
It’s still too soon to say how Brazil’s latest political drama will play out, but the key point for the economy is that the crisis has not yet caused a sharp tightening in financial conditions. … Brazil: no signs (yet) of major tightening in financial …
22nd May 2017
The sharp slowdown in Colombian GDP growth in Q1 was due in part to a 3%-pt hike in VAT at the start of this year. We expect Q1 to be the bottom, but the risks to our below-consensus GDP growth forecast for this year now lie to the downside. … Colombia …
19th May 2017
Chile’s central bank cut its policy interest rate by another 25bp, to 2.50%, but with the economy showing tentative signs of recovery, we think the easing cycle is over for now. We expect the policy rate to remain on hold for the rest of this year and all …
Chile’s economy narrowly avoided entering a technical recession in Q1 and, while growth has all but ground to a halt in recent quarters, there are tentative signs of a recovery. Meanwhile, the current account deficit remained broadly in check. … Chile GDP …
18th May 2017
Allegations that Brazilian president Michel Temer endorsed bribes to buy the silence of former house speaker, Eduardo Cunha, has dealt a fresh blow to the government’s reform agenda. The real and bond markets are likely to sell-off when they open later …
We have just returned from a week of meetings with investors and local contacts in Mexico City. In this Update we summarise four quick takeaways. … Mexico: Notes from the …
15th May 2017
March activity data confirmed that Peru’s economy slowed sharply in Q1 and, while growth should pick up over the coming months as the temporary drag from severe floods eases, the weak start to the year means we are revising down our GDP growth forecast …
Mexican industrial production continued to broadly stagnate in March, but this is still far from the collapse that the survey data are pointing to. Indeed, if anything, today’s data suggest that the robust provisional estimate of Q1 GDP growth might be …
12th May 2017
