Stronger growth won’t bring forward rate hikes

With policymakers throughout the region now signalling that rates have troughed, attention has turned to the timing of rate hikes in 2010. We have revised up our growth forecasts for next year, but with growth still set to remain below potential there are few inflationary threats. As a result, we see little reason to bring forward our forecasts for rate hikes to start in Q4 2010. The exception is Mexico, where the pending fiscal tightening in 2010 will see hikes delayed until 2011.