Trump, the US election and the implications for Latin America

Donald Trump’s performance in last night’s first US presidential election debate doesn’t appear to have done himself any favours, but his election in November is still a real possibility. This would have significant repercussions for Mexico’s economy, although a drop in the peso would help to cushion the effects. Elsewhere, Peru and a handful of Central American economies (Honduras, El Salvador and Guatemala) could be affected if Mr. Trump curtails US aid or outward remittance flows. But the direct impact on larger economies, including Brazil and Argentina, is likely to be limited. The biggest risk to these economies is through an indirect rise in global risk premia.