New forecasts for Lat Am inflation & rates

We estimate that the impact of higher fuel, food and potentially goods prices triggered by the war in Ukraine will add roughly 1.0%-pt to headline inflation rates across major Latin American economies this year. One key lesson from the past year is that central banks will tighten aggressively in the face of growing inflation risks and, as a result, we’ve added 75-200bp to our policy rate forecasts in the region.