Latin America Economics Update Peruvian economy carrying plenty of momentum in 2011 Peru released monthly GDP data for December this afternoon which suggest that output increased by 9% last year. With the economy carrying plenty of momentum we are revising up our forecast and now... 15th February 2011 · 1 min read
Latin America Economics Update Peruvian rates edge higher, other measures to be deployed The Central Reserve Bank of Peru (BCRP) hiked interest rates by 25bps to 3.5% last night. With the economy booming and inflation pressures building, further rate hikes will probably follow over the... 11th February 2011 · 1 min read
Latin America Economics Update Brazil's cuts look big but off-balance sheet spending still key Last night’s announcement of budget cuts worth R$50bn (1.3% of GDP) should mean that Brazil’s government meets – or perhaps even betters – its ‘official’ target for the primary budget surplus of 3% of... 10th February 2011 · 1 min read
Latin America Economics Update Inflation still being driven by food and energy prices Data released this morning show that rising global commodity prices continue to be the main driver of inflation in both Brazil and Chile. But while these effects may fade over the course of 2011... 8th February 2011 · 1 min read
Latin America Economics Update Is Mexican manufacturing bucking the trend? The drop in Mexico’s IMEF Manufacturing Index last month stands in stark contrast to the recent strength of industrial surveys elsewhere in the world, notably the US. The good news is that the... 4th February 2011 · 1 min read
Latin America Economics Focus Brazil: managing the risks of abundance The near-term outlook for Brazil remains extremely good, in part due to the strength of capital inflows and a boom in domestic lending. But we are becoming increasingly concerned that both factors... 2nd February 2011 · 1 min read
Latin America Economics Update Brazil manufacturers squeeze margins to compete The pick-up in January’s PMI suggests that after a torrid second half to 2010, Brazilian manufacturers have enjoyed a decent start to 2011. Unfortunately, it seems that producers have had to squeeze... 1st February 2011 · 1 min read
Latin America Economics Update BANREP turns more hawkish, but rate hikes likely to be gradual The Central Bank of Colombia (BANREP) held interest rates at 3.0% last night, as expected. But the accompanying statement was more hawkish than in previous. There is a risk that interest rates will... 1st February 2011 · 1 min read
Latin America Chart Pack Inflation concerns refuse to fade Inflation is on the rise throughout most of Latin America. For now at least, this has been driven almost entirely by an increase global commodity prices, which has quickly passed through to headline... 28th January 2011 · 1 min read
Latin America Economics Update Tombini makes his mark The minutes from this month’s meeting of the Brazilian Monetary Policy Committee (COPOM) were unequivocally hawkish and should banish any lingering concerns about a shift in policy priorities under... 28th January 2011 · 1 min read
Latin America Economics Update Rising inflation to be met with unorthodox measures With the notable exception of Mexico, containing inflation remains the immediate challenge for policymakers in Latin America. Although the pick-up in inflation looks set to be driven by food and... 24th January 2011 · 1 min read
Latin America Economics Update Interest rate hikes remain a distant prospect in Mexico As expected, the Central Bank of Mexico (BANXICO) held interest rates at 4.5% this afternoon. Speculation is mounting that rising food prices could trigger a rate hike over the coming months but the... 21st January 2011 · 1 min read
Latin America Economics Update Tombini starts with a hike, attention now turns to fiscal policy Last night, the Brazilian Central Bank (BCB) hiked interest rates by 50bps to 11.25%. Rates will probably be increased by another 50bps at March’s meeting too. But if rumours of a fiscal tightening... 20th January 2011 · 1 min read
Latin America Economics Update Credit risks are growing, but banking sector still strong Latin America’s financial system is still in good shape, especially when compared to that of the developed world. Nevertheless, lending has accelerated throughout the region and default rates, notably... 18th January 2011 · 1 min read
Latin America Economics Update Chilean rates on hold, but further hikes are likely Last night, the Central Bank of Chile (CBC) held interest rates at 3.25% but highlighted the need for further monetary tightening. Accordingly, we are sticking to our below-consensus forecast for... 14th January 2011 · 1 min read
Latin America Economics Update Tighter fiscal policy is still the key for Brazil Contrary to claims by some commentators, we think that tighter fiscal policy has a key role to play in ensuring that Brazil meets its current inflation/inflows challenge. Indeed, we would go as far to... 14th January 2011 · 1 min read
