Latin America Economics Update Higher rates quickly adding to Brazil’s fiscal challenge By next year, Brazil’s public sector interest payments could be almost twice as large (at ~8% of GDP) as they were in 2020, making the challenge of stabilising the public debt-to-GDP ratio all the... 15th November 2021 · 3 mins read
Latin America Economics Weekly Core inflation concerns, elections in focus The October CPI figures out of the region this week, which showed a marked strengthening of core inflation, are likely to ring alarm bells for central banks in the region and may trigger larger rate... 12th November 2021 · 6 mins read
Asset Allocation Update We expect LatAm equities to trail those in EM EMEA We think that MSCI’s Emerging Markets (EM) Latin America Index will continue to underperform its EM EMEA Index over the next couple of years, albeit not to the same extent as it has in 2021 so far. 12th November 2021 · 5 mins read
Latin America Economics Update Banxico sticking to gradual pace of tightening The Mexican central bank’s 25bp rate hike, to 5.00%, and the accompanying statement showed little sign that policymakers are likely to follow their peers in Latin America by upping the pace of... 12th November 2021 · 3 mins read
Emerging Markets Economics Update Food prices a key factor behind diverging EM inflation A significant share of the difference in headline inflation between Emerging Asia and other emerging regions has been driven by food inflation, which appears to be related to domestic conditions more... 12th November 2021 · 2 mins read
Latin America Data Response Mexico Industrial Production (Sep.) The surprise 1.4% m/m drop in Mexican industrial production in September in large part reflects auto sector woes and suggests that the flash Q3 GDP estimate of -0.2% q/q may be revised down. This... 11th November 2021 · 2 mins read
Latin America Economics Update Argentina’s election: approaching a fork in the road The ruling Frente de Todos (FdT) coalition is likely to lose some of its power in congress in Argentina’s midterm elections on Sunday. Policymaking could subsequently go in one of two ways. Our... 10th November 2021 · 5 mins read
Latin America Data Response Brazil IPCA (Oct.) The larger-than-expected jump in Brazilian inflation, to 10.7% y/y, last month, coming alongside a rise in inflation expectations and continued fiscal risks, increases the likelihood that Copom ups... 10th November 2021 · 2 mins read
Latin America Data Response Mexico Consumer Prices (Oct.) The rise in inflation in Mexico to 6.2% y/y in October paves the way for another rate hike at the central bank’s meeting on Thursday. However, the surprise fall in GDP in Q3 will probably keep the... 9th November 2021 · 2 mins read
Emerging Markets Economics Update Five points on the latest virus developments in EMs The COVID-19 situation in many EMs has improved markedly over the past month or so as new infections have fallen sharply and vaccine rollouts have gathered pace. That said, the recent surge in virus... 5th November 2021 · 4 mins read
Latin America Economics Weekly Chile feeling the heat, Brazil bending the (fiscal) rules Strong September activity data out of Chile this week adds to signs that that the economy is starting to overheat, which will put even more pressure on the central bank to take some steam out of the... 5th November 2021 · 7 mins read
Global Markets Update We doubt Brazilian assets will rebound any time soon While Brazil’s bond and stock markets have struggled lately, we don’t think either are set for a significant rebound any time soon, and suspect both will remain under pressure in the run-up to next... 5th November 2021 · 5 mins read
Latin America Economics Update We expect the Brazilian real to remain under pressure We think that the Brazilian real will weaken a bit further against the US dollar over the next year, as fiscal risks and deteriorating terms of trade continue to weigh on the currency. In view of the... 4th November 2021 · 4 mins read
Latin America Economics Update Does Brazil’s inverted yield curve point to a recession? Brazil’s inverted yield curve has raised concerns that the economy may be on the brink of a recession, but it doesn’t have a particularly good track record as a leading indicator for economic... 4th November 2021 · 3 mins read
Latin America Data Response Brazil Industrial Production (Sep.) The 0.4% m/m fall in Brazilian industrial production in September suggests that the sector knocked 0.1-0.2%-pts off q/q GDP growth over Q3 as a whole. The latest surveys suggest that October’s figures... 4th November 2021 · 2 mins read
Emerging Markets Economics Update Fiscal risks loom largest in Lat Am & S. Africa Among the major EMs, long-term fiscal problems look most challenging in South Africa and several large Latin American economies. And rising interest rates will make the fiscal squeeze needed to... 3rd November 2021 · 3 mins read
