Colombia’s pensions, external surpluses & Mexican oil

Colombia may be about to follow Chile and Peru in allowing citizens to tap into their pension savings, which would help to shore up near-term consumer spending. But Colombia has less scope than its Andean peers to shoulder the potential long-term fiscal costs of the plan. Otherwise, improving external positions in Brazil and Mexico should limit downside risks to their currencies, but it also demonstrates the weakness of domestic demand in both countries. Finally, touted reforms to Mexico’s energy sector suggest that Pemex’s structural issues will not be resolved anytime soon.