Colombian tax reform, vaccines and Brazil’s struggles

A tax reform bill in Colombia, that will be sent to Congress next week, has slipped under the radar but this legislation could have a major bearing on the country’s sovereign investment grade rating. Elsewhere, Chile’s vaccination programme has raced ahead this week and is one reason behind our recent upwards revision to our 2021 GDP growth forecast (to 9.0%). Finally, while Brazil’s virus outbreak is getting worse by the day, the central bank showed at Wednesday’s meeting that it is focused on inflation and fiscal risks. We expect 200bp of additional rate hikes in the next few months.