The past month has brought yet more evidence that Brazil’s economy has come rapidly off the boil. Indeed, it seems likely that the country may now, in technical terms at least, be in recession. For now, the rest of the region appears to be holding up rather better. But even so we doubt that Latin America can remain isolated from the effects of a renewed global downturn next year. We forecast regional growth to slow to a below-consensus 2.5% in 2012. And with inflation set to fall back, we expect every major central bank in the region to follow Brazil’s lead and cut interest rates in the first half of next year.