Slow regional recovery, Argentina headed for default

After a weak 2019, we expect that growth across most of Latin America will improve next year. That said, our forecasts for the regions two biggest economies – Brazil and Mexico – are below consensus. And Colombia and Argentina will miss out on this tepid recovery. The latter now almost certainly faces a painful debt restructuring regardless of the result of October’s election. Inflation problems will persist in Argentina and Venezuela, but inflation in the rest of the region will probably be lower in 2020 than it has been since the 1960s. Monetary policy is set to be loosened in most places, with the exception of Colombia.