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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Latin America Economics Weekly

Argentina’s PASO surprise, Pemex debt

The loss for Argentina’s ruling Peronists in the open primary (PASO) for mid-term legislative elections in November suggest that the political tides might be shifting and boosted local financial markets. But the country’s public debt problems are likely to re-surface before too long. Meanwhile, the news that Mexico’s government has purchased $7bn of foreign exchange from the central bank appears to be another step towards the state taking greater responsibility for Pemex’s debt problems.

17 September 2021

Latin America Economics Update

Is high inflation here to stay in Latin America?

Following a surge in inflation across the region this year, we think that headline rates are at, or close to, a peak in major Latin American economies. But strong underlying price pressures will prevent inflation from falling below central banks’ targets over the next year or so. Monetary tightening cycles therefore have a lot further to run across the region, especially compared to elsewhere in the emerging world.

15 September 2021

Latin America Economics Weekly

Brazil’s political crisis, Mexico’s austere budget

It’s been a rollercoaster week in Brazilian politics and financial markets and, while investors have breathed a small sigh of relief in the past day or so, we think that they will be put under further pressure as the 2022 election nears. Elsewhere, Mexico's austere 2022 budget unveiled this week suggests that fiscal policy will continue to do very little to support the economy, which reinforces our view that Mexico's recovery will underperform most of its regional peers.
CE Spotlight 2021: The Rebirth Of Inflation? We’re holding a week of online events from 27th September to accompany our special research series. Event details and registration here.

10 September 2021

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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