Emerging Markets Economics Chart Pack Supply shortages take their toll The supply shortages that have affected many DMs have also intensified in emerging economies over the past couple of months. The automotive sector has been hit hard by global semiconductor shortages... 18th October 2021 · 9 mins read
EM Valuations Monitor Lower valuations may not help EM equities outperform We don’t think the low valuations of emerging market (EM) equity indices relative to those of developed markets (DMs) is reason to expect EM equities to outperform over the next couple of years. 18th October 2021 · 8 mins read
Latin America Economics Weekly The fiscal risk of rising rates, Mercosur tariff cuts Central banks were once again in the spotlight this week after the supersized 125bp rate hike in Chile, but one issue that is often overlooked is the damaging impact of rising interest rates on public... 15th October 2021 · 5 mins read
Emerging Markets Economics Update Car woes to weigh on recoveries in Mexico & CEE The supply constraints that have hit global vehicle output have probably reduced the level of GDP by a modest 0.1-0.2% in most EM auto producers, but some countries like Czechia, Hungary and Mexico... 15th October 2021 · 2 mins read
Latin America Economics Update Brazil: signs of stagflation The multitude of supply shocks hitting Brazil’s economy are likely to keep inflation at 7-10% well into next year and cause the pace of recovery to slow to a crawl in the next few quarters. Overall... 14th October 2021 · 4 mins read
FX Markets Update We expect the rally in commodity currencies to be short-lived Although we wouldn’t be surprised if energy prices remained elevated for a while, we still think they will fall back over the next year, weighing on the currencies of net energy exporters. 14th October 2021 · 2 mins read
Latin America Economics Update Chile: front-loaded tightening cycle has further to run The surprisingly large 125bp rate hike delivered by Chile’s central bank yesterday, to 2.75%, suggests that it will continue to front-load its tightening cycle to clamp down on high inflation. We now... 14th October 2021 · 3 mins read
Emerging Markets Economics Update Emerging Markets Capital Flows Monitor Net capital inflows into EMs appear to have dropped over the past few weeks as investors have turned more risk averse. Looking ahead, a further rise in US Treasury yields could lead to larger outflows... 13th October 2021 · 2 mins read
Latin America Data Response Mexico Industrial Production (Aug.) The stronger-than-expected 0.4% m/m rise in Mexico’s industrial production in August suggests that the economy may have held up better than we had previously anticipated in Q3. But, under the surface... 12th October 2021 · 2 mins read
Latin America Economics Weekly Castillo moderates, Amlo’s intervention & ailing autos President Castillo’s cabinet reshuffle in Peru this week points towards more pragmatic policymaking which, while a possible headwind to near-term growth, should boost Peru’s medium- to long-term... 8th October 2021 · 6 mins read
Latin America Data Response Brazil IPCA (Sep.) The jump in Brazilian inflation to 10.2% y/y in September was largely a result of the hike in household electricity tariffs last month and, while the headline rate is at – or very close to – a peak... 8th October 2021 · 2 mins read
Latin America Data Response Chile Consumer Prices (Sep.) The jump in Chile’s inflation to 5.3% y/y in September suggests that the central bank may once again ramp up the pace of its tightening cycle. We now think it is more likely than not that it will... 8th October 2021 · 2 mins read
Latin America Economics Update Lessons from Brazil’s 2001/02 energy crisis The threat of energy shortages looms over Brazil once again. The country’s experience with electricity rationing in 2001/02 offers a useful guide about how the situation may pan out. We estimate that... 7th October 2021 · 4 mins read
Latin America Data Response Mexico Consumer Prices (Sep.) The rise in Mexico’s headline and core inflation to 6.0% y/y and 4.9% y/y in September adds to our view that the central bank’s tightening cycle has much further to run. We expect a further 125bp of... 7th October 2021 · 2 mins read
Emerging Markets Economics Update China’s long-term property decline: the fallout for EMs Irrespective of how the current problems in China’s property sector are resolved, property construction there is entering a period of structural decline. Among other EMs, the main effects will be felt... 7th October 2021 · 3 mins read
Global Markets Update Taking stock of the sell-off in EM LC bonds We expect the yields of 10-year emerging market (EM) local-currency (LC) government bonds to rise over the coming years. But, in most EMs, we think yields will rise by less than the 10-year US... 6th October 2021 · 4 mins read
