Latin America Economics Update Brazil: is a corporate debt crisis brewing? The dramatic rise in borrowing costs in Brazil in the past few years appears to be causing debt problems at a growing number of companies. So far at least, there is little evidence of widespread... 28th February 2023 · 4 mins read
Latin America Data Response Brazil IPCA-15 (February 2023) The fall in Brazilian inflation to 5.6% y/y in the first half of this month was driven by lower food inflation and won’t ease policymakers’ concerns about the strength of core inflation. We continue... 24th February 2023 · 2 mins read
Latin America Chart Pack External vulnerabilities to ease as growth weakens The latest data suggest that current account deficits in the region’s major economies narrowed towards the end of last year, which is particularly good news for Colombia and Chile. Both were running... 22nd February 2023 · 15 mins read
Emerging Markets Economics Update EM investment: weak outlook and clear divergence EM investment surged far above pre-pandemic levels last year, but there was a clear divergence across countries and we think investment growth will slow in 2023. One worrying development is that... 20th February 2023 · 4 mins read
Latin America Economics Weekly Petro spooks investors (once again), Brazil’s fiscal rule In Colombia, President Petro’s healthcare reform unveiled this week reinforces our concerns about a worsening public debt trajectory and more interventionist policymaking, and caused the peso to fall... 17th February 2023 · 6 mins read
Global Markets Update We expect equities in Brazil to continue to struggle We expect MSCI’s Brazil Index to drop over the next couple of quarters in local-currency terms, before it begins to recover towards the end of this year. 17th February 2023 · 3 mins read
Latin America Economics Weekly Hawks still rule the roost, BCB threats This week’s larger-than-expected interest rate hike in Mexico alongside comments from central bank officials elsewhere suggest that worries about strong underlying price pressures are putting... 10th February 2023 · 6 mins read
Latin America Data Response Brazil & Mexico CPI (Jan.) Mexico’s headline inflation rate edged up to 7.9% y/y in January, setting the scene for Banxico to raise interest rates by 25bp, to 10.75%, later today. We think that this will mark the end of the... 9th February 2023 · 2 mins read
Latin America Economics Update Lula and the threat to the BCB’s independence Brazil’s president Lula seems to be on the warpath in his quest for lower interest rates and now has the central bank’s (BCB’s) independence in his sights. Were Lula to get his way, the experience... 8th February 2023 · 3 mins read
Latin America Economics Update Brazil’s BNDES: new leader, old problems The newly-appointed head of the Brazilian development bank, BNDES, takes charge today and is likely to be under pressure to increase lending. But the experience from the 2000s suggests that credit... 6th February 2023 · 3 mins read
Latin America Economics Weekly Weak survey data, inflation concerns, rate forecasts The batch of survey data for January released this made for pretty depressing reading and reinforces our view that, despite the boost from commodities, regional growth will slow sharply this year... 3rd February 2023 · 7 mins read
Latin America Data Response Brazil Industrial Production (Dec.) The stagnation in Brazilian industrial production in December is consistent with a 0.5% q/q fall in output over Q4 as whole, indicating that the sector was a drag on the economy. And the early signs... 3rd February 2023 · 2 mins read
Latin America Economics Update Lula’s hopes for a higher inflation target would backfire The suggestion by Brazil’s President Lula that the central bank’s inflation target should be raised is likely to be a bigger concern for the second half of his presidential term (2025-26) than the... 2nd February 2023 · 3 mins read
Emerging Markets Economics Update EM banks well placed to face rising loan losses EM banks will face an increase in loan losses this year, but the good news is that banking sectors on the whole appear well-placed to absorb these, particularly in parts of Latin America, Emerging... 2nd February 2023 · 4 mins read
Latin America Economics Update Brazil: Copom casts doubt on 2023 rate cuts The statement accompanying yesterday’s Brazilian central bank meeting, at which the Selic rate was left at 13.75%, hinted that interest rates may need to stay at their current high level into next... 2nd February 2023 · 3 mins read
Latin America Economics Focus Brazil’s rapid wage growth flying under the radar 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... 1st February 2023 · 12 mins read
