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Mexico GDP (Q2 Prov.)

The re-opening of Mexico’s economy caused GDP growth to accelerate to 1.5% q/q in Q2, and we suspect that this preliminary figure will be revised up. But with new virus cases rising sharply, the economy is likely to slow in Q3.
William Jackson Chief Emerging Markets Economist
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More from Latin America

Latin America Economics Update

Banxico to take its foot off the brakes

Mexico’s central bank (Banxico) hiked interest rates by 75bp, to 8.50%, for a second consecutive meeting yesterday but, amid mounting evidence that the economy is struggling and with inflation close to a peak, we think that the pace of tightening will slow from here. Our forecast is for the policy rate to reach 10.00% by year-end, which is a touch more hawkish than investors anticipate.

12 August 2022

Latin America Data Response

Mexico Industrial Production (Jun.)

Mexico’s industrial sector posted sluggish growth of just 0.1% m/m in June and the data suggest that the first estimate of Q2 GDP growth may be revised down. The backdrop of weakness in the US means that we expect Mexican industrial activity to stay soft over the rest of this year. But that is unlikely to deter Banxico from delivering further monetary tightening, including another 75bp hike, to 8.50%, later today.

11 August 2022

Latin America Data Response

Brazil IPCA (Jul. 2022)

The sharp fall in Brazilian inflation to 10.1% y/y in July from 11.9% y/y in June was mainly a result of tax cuts on energy; inflation in most other price categories remains extremely strong. Even so, at the margin, this data release increases the likelihood that the central bank will keep interest rates unchanged (rather than opt for a final 25bp hike) at its next meeting in September.

9 August 2022

More from William Jackson

Africa Chart Book

Delta threat building

The highly contagious Delta variant of COVID-19 seems to be dominant now across much of Sub-Saharan Africa and is driving new waves in many of the large economies. South Africa appears to be over the worst of its latest outbreak, although it now has to contend with the legacy of violence and unrest earlier this month. Elsewhere, cases are rising quickly and could dampen recoveries. Extremely low vaccine coverage makes the region particularly vulnerable to this variant and potential future ones. Even in South Africa, where the rollout is quick by regional standards, at the current pace it would take a year for vaccine coverage to reach the levels offering protection against new variants seen in DMs.

29 July 2021

Middle East Chart Book

OPEC+ agreement provides a boost to Gulf recoveries

The end of the impasse within OPEC+ this month will result in higher oil output and boost recoveries in the Gulf over the second half of this year and in 2022. Output quotas will rise by 400,000bpd each month after the UAE backed down in return for having its baseline production raised from next year. More supply on the market is likely to weigh on oil prices, but we think that the impact on Gulf oil export revenues will be more than offset by rising production volumes. As a result, budget and account positions in the Gulf will improve, providing policymakers with a small window to loosen fiscal policy and support recoveries in the region’s non-oil sectors.

28 July 2021

Emerging Europe Chart Book

Activity rebounding as economies re-open

The region’s economies have continued to rebound strongly over the past month as virus outbreaks have largely been contained and restrictions have been lifted. Surveys of sentiment in the services sector have surged and high-frequency mobility data have risen far above pre-pandemic levels. Turkey’s recovery seems to have been particularly rapid since the end of its lockdown in May. Admittedly, there are reasons to be cautious. Israel’s re-opening boost seems to be fading, the Czech auto sector has been hampered by shortages of inputs and the highly transmissible Delta variant has now become the dominant strain in most places. But vaccine coverage is generally high and we think recoveries will make further headway in Q3.

28 July 2021
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