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The acceleration in Chile’s GDP growth in the third quarter is an encouraging sign that, after a brief slowdown in the previous quarter, the economic recovery is back on track. GDP growth is still likely to be a lacklustre 2.2% over 2015 as a whole, but …
18th November 2015
The huge 6.2% y/y decline in Brazil’s Economic Activity Indicator in September was the steepest fall on record and, at face value, is consistent with a contraction in GDP of close to 5% y/y over Q3 as a whole. In seasonally-adjusted q/q terms, that means …
The pick-up in Peruvian economic activity in September suggests that the economy’s recovery is still on track. Nonetheless, the weakness of August’s data means that GDP growth was probably unchanged in Q3 from Q2. … Peru Economic Activity …
13th November 2015
The Central Reserve Bank of Peru’s decision to leave interest rates on hold at 3.50% came as no surprise and the accompanying statement suggests that policymakers feel little pressure to tighten monetary conditions. But we suspect that inflation will not …
The flurry of Q3 GDP data due over the coming weeks are likely to show that the downturn in Latin America’s economy has begun to bottom out. But this marks a wide divergence in performance at a country level. While growth in Mexico, Chile, Colombia and …
12th November 2015
The further pick-up in Mexican industrial production growth in September, to 1.7% y/y, suggests that the sector may finally be finding its feet. But overall, industry probably contributed only a meagre 0.4%-pts to annual GDP growth in Q3. … Mexico …
11th November 2015
October’s 2.5% y/y rise in Mexican consumer prices is unlikely to change the near-term monetary policy outlook given that it was in line with expectations and unchanged from September. Instead, with a US rate hike in December now back on the table after …
9th November 2015
October’s rise in Brazilian inflation, to 9.9% y/y, was due in part to a fresh increase in regulated fuel prices, but it looks like the recent slide in the real also played a role. Elsewhere in Latin America, inflation in Colombia rose further above …
6th November 2015
The sharp falls in currencies across Latin America over the past year have pushed up inflation in most countries. But the extent of the pass-through has varied significantly. The effect has been strongest in Colombia and Chile, while in Brazil and Peru …
5th November 2015
The 10.9% y/y fall in Brazilian industrial production in September, coming on the back of similarly steep falls in output July and August, means that the sector probably subtracted around 2.0%-pts from annual GDP growth over Q3 as a whole. … Brazil …
4th November 2015
The drop in Brazil’s manufacturing PMI in October, to a five-year low of 44.1, is an early (and ominous sign) that the country’s recession continued into Q4. Perhaps the one crumb of comfort in today’s data is that the weakness still appears be …
3rd November 2015
The Venezuelan government has continued to block the publication of almost all economic data, but our GDP Tracker suggests that output is now contracting by close to 10% y/y. This would mean that the economy is in the midst of its worst recession in over …
2nd November 2015
The decision by Colombia’s central bank to hike interest rates by more than expected was a move partly designed to clamp down on a recent surge in inflation but also to maintain its credibility in the markets. With inflation set to remain well above …
Activity data from Chile picked up in September despite a major earthquake hitting the country. Encouragingly our GDP Tracker suggests that GDP growth edged up over Q3 as a whole. … Chile Retail Sales, Ind. Prod. & Copper Prod. …
29th October 2015
The surprise outcome of the presidential election in Argentina has raised the prospect of a shift towards more market-friendly policymaking, following 12 years of populism under successive Kirchner governments. The markets have rallied on the news, with …
28th October 2015
Following a torrid Q3, Latin America’s financial markets have had a good start to Q4. Equities, bonds and currencies have all rallied so far this month. Looking ahead, it will be a bumpy ride over the next year or so, but the outlook for the region’s …
27th October 2015
The decision by Brazil’s central bank not to raise interest rates last week has sparked a debate over whether Latin America’s largest economy has succumbed to “fiscal dominance” – whereby fiscal considerations become the overriding driver of monetary …
The 2.6% y/y rise in Mexico’s IGAE Economic Activity Indicator in August was driven by a pick-up in growth in the agriculture and services sectors. More generally, the Activity Index for July and August points to stronger GDP growth in Q3 than in Q2. … …
26th October 2015
A much narrower-than-expected victory for Daniel Scioli in Argentina’s general election means that outgoing president Cristina Kirchner’s chosen successor will face a tricky second-round run-off on 22nd November against centre-right candidate Mauricio …
The 2.5% y/y rise in Mexican consumer prices in the first half of this month is unlikely to have much of a bearing on next Wednesday’s MPC meeting, given that it was in line with expectations. However, an appreciation of the peso and a scaling back of US …
22nd October 2015
Our latest Banking Heat Map shows that credit bubbles across Latin America have started to deflate. So far at least, this does not appear to have triggered widespread problems for the region’s financial system. While default rates are edging up, they …
News that Mexico’s flagship Volkswagen (VW) plant has cut weekend shifts, frozen hiring and scaled back production in the wake of the emissions scandal that has engulfed the company has raised concerns about the wider impact on Mexico’s economy. However, …
21st October 2015
The latest rise in inflation in Brazil, to a 12-year high of 9.8% y/y in the first half of this month, was driven by another increase in regulated fuel prices and was in line with expectations. It is therefore unlikely to have much bearing on the outcome …
The primary driver of the slump in Brazil’s economy over the past year has been a collapse in business investment. We expect this to ease towards the end of this year – with consumer spending taking over as the main source of economic weakness in 2016. … …
19th October 2015
Daniel Scioli, the candidate of Argentina’s left-wing ruling coalition, seems on course to win the presidential election in the first round on 25th October. His plans for the economy have been unimpressive but, as we explain in this Watch , Argentina is …
16th October 2015
The 4.5% y/y drop in Brazil’s Economic Activity Indicator in August suggests that the country’s recession probably deepened over Q3 as a whole. The monthly activity data suggest that this deterioration was broad-based. … Brazil Economic Activity Indicator …
Chile’s decision to raise interest rates last night is likely to be followed by another hike soon, but the bigger picture is that the tightening cycle is likely to be short. Meanwhile, although the Peruvian central bank left policy unchanged yesterday, we …
The weakening of Peru’s economy in August is disappointing, but we don’t think this is the start of a sustained downturn and the recovery remains on track. … Latin America Data …
15th October 2015
The modest 1.0% y/y rise in Mexican industrial production masked the more encouraging 3.1% y/y increase in manufacturing output. But the bigger picture is that the sector remains weak. … Mexico Industrial Production …
12th October 2015
The further fall in Mexican inflation in September, coming on the back of dovish minutes from last month’s MPC meeting published this week, and a recent appreciation of the peso against the dollar, has strengthened the case for monetary tightening to be …
8th October 2015
The fall in Chilean inflation in September, to 4.6% y/y, is an encouraging sign that price pressures resulting from the sharp fall in the peso over the past year are starting to wane. But with inflation likely to remain above target for some time, this is …
Inflation in Brazil was unchanged at 9.5% y/y in September, but the headline rate is on course to rise again in October as fuel price hikes recently announced by state-owned oil company Petrobras come into effect. … Brazil Consumer Prices …
7th October 2015
Latin America is one of the most exposed emerging market regions to the slowdown in China’s economy. The actual impact so far has varied between countries. Venezuela, Peru, and Chile have been hardest hit, but none of the major economies in the region …
6th October 2015
Economic activity data from Chile have been weak in recent months, but we don’t think this marks the start of a deeper downturn. The softer data have been largely the result of various temporary disruptions and the economic recovery should resume over the …
5th October 2015
The huge 1.2% m/m fall in Brazilian industrial production in August was driven largely by a steep decline in capital goods production. One factor behind this seems to be the escalating corruption scandal at state-owned oil company Petrobras, which is …
2nd October 2015
The pick-up in Brazil’s manufacturing PMI last month, to 47.0 from 45.8 in August, was encouraging, particularly following recent early signs in the hard data that the slump in the economy may be starting to bottom out. … Brazil & Mexico Manufacturing …
1st October 2015
This report is only available as a PDF. Click to download. … Brazil reinstates FX swap programme as real fall spooks policymakers …
30th September 2015
This report is only available as a PDF. Click to download. … Brazil fuel price hikes to give further push to inflation …
Brazil has slipped deeper into crisis over the past month. The slump in the real economy has gathered pace, with our GDP Tracker now suggesting the output could have contracted by up to 4% y/y in Q3. Meanwhile, the political crisis enveloping President …
29th September 2015
The good news is that the Brazilian real is no longer in freefall and appears to have stabilised at around 4.0/$ in recent days following verbal intervention by policymakers. We’re still taking a relatively sanguine view of the slide in the real. But a …
28th September 2015
The Central Bank of Colombia’s decision to hike interest rates took many analysts by surprise and demonstrated policymakers’ determination to keep inflation under control. However, with inflation likely to fall back over the next year as the economy …
The downturn in regional economic growth and a raft of corruption scandals have dented presidential approval ratings across Latin America over the past year. This has marked the return of political risk to the region. In the near term, this will be yet …
25th September 2015
Mexico’s IGAE Activity Indicator for July was weak and is the first sign that the economic slowdown continued into Q3. Better news came from today’s inflation data, which showed that the headline rate fell further in the first half of this month. … Mexico …
24th September 2015
Brazil’s economic vulnerabilities have been brought into sharper focus in recent weeks after (yet another) slump in local financial markets. In this Focus we revisit key aspects of our research over the past few years to explain where it all went wrong …
Brazil’s public finances are in a mess, but mounting fears of a sovereign default are overdone. … Brazil: in a fiscal hole, but default fears …
23rd September 2015
Barring an unexpected jump in prices over the coming weeks, data to the middle of this month suggest that inflation in Brazil is on course to drop back in September. … Brazil IPCA-15 …
22nd September 2015
Brazil’s Economic Activity Indicator for July suggests that GDP fell at an even faster pace at the start of Q3 than in Q2. But there are some early signs that the slump may be close to bottoming out. … Brazil Economic Activity Indicator …
21st September 2015
Our Argentina Activity indicator (AAI) suggests that the economy grew in Q2 for the first time since 2013. However, this appears to have been due largely to an aggressive loosening of fiscal policy, which will have to be reversed following October’s …
The Central Bank of Chile left its policy interest rate unchanged at 3.00% last night, but the more hawkish accompanying statement pointed to rate hikes in the near future. As such, we are bringing forward our forecast for two 25bp hikes to this year …
16th September 2015
The growth of economic activity in Peru slowed slightly in July to 3.3% y/y. But even so, the reading is still relatively strong by the standards of the past year and we expect growth to pick up a little over the rest of the year. … Peru Economic Activity …
15th September 2015
