High commodity prices caused by the war in Ukraine have driven a rally in Latin American currencies and equities this month, and are causing exports to surge. Weekly trade figures from Brazil and Chile show that exports were up by 25-40% y/y in early March (in dollar terms). But domestic conditions remain challenging. Timely surveys from Brazil show that confidence fell this month, which seems linked to high and rising inflation. Meanwhile, financial conditions have tightened a little further across most of the region which is likely to weigh on credit growth. In short, the region still faces a slow and bumpy recovery.
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