Mexico stimulus, Colombia austerity, dovish surprises

The Mexican government’s fiscal stimulus, unveiled this week, looks large enough to support an economic recovery in the second half of the year, but raises medium term fiscal risks. In contrast, Colombia’s 2020 budget envisages a continuation of austerity, which will keep growth weak. Looking ahead to next week, we think that Peru’s central bank will be the next in Latin America to spring a dovish surprise. We’ve now pencilled in a 25bp cut at its meeting on Thursday.