Weak survey data suggest soft start to 2017

The recent deterioration in survey data across most of Latin America suggests that the region’s economic recovery may have softened at the start of 2017. Following President Trump’s inauguration and a cut in fuel subsidies, consumer confidence in Mexico dropped to its lowest level on record in January. This indicator isn’t the most reliable, but other more trustworthy survey data weakened too. Elsewhere, consumer confidence in Colombia also plummeted to a record low on the back of a hike in VAT, while sentiment in Peru has deteriorated as the Odebrecht scandal has implicated a number of current government officials as well as two ex-presidents. The good news is that the survey data have been a bit better in Brazil; most reliable manufacturing and consumer confidence indices edged up in January. And, following sharp falls over the past six months, consumer and business confidence in Chile finally appears to be bottoming out. Taken together, however, the recent batch of survey data is disappointing and is an early sign that the region’s economic recovery may have started the year on a softer footing.