Latin America Economics Update We expect the Brazilian real to reverse some of its gains The sharp rally in the Brazilian real against the US dollar since the start of the year has shown tentative signs of ending, and we think that it will weaken a bit through the end of 2022. In view of... 14th April 2022 · 2 mins read
Latin America Economics Update Brazil: making sense of the latest surveys Depending on which activity survey you look at, Brazil’s economy either staged a rapid recovery in March or slowed. A comprehensive look at the latest figures suggests that the latter is more likely... 12th April 2022 · 4 mins read
Latin America Economics Update Mexico: the implications of Amlo’s recall referendum Mexican President López Obrador is likely to remain in power after a recall referendum on his position this Sunday, which may embolden him to double down on his interventionist agenda. While a radical... 5th April 2022 · 3 mins read
Latin America Economics Update Argentina: Catch-22 for IMF deal 22 One issue the IMF seems to be glossing over in its latest deal with Argentina (the 22 nd in the country’s history) is that the currency looks overvalued. But the adjustment needed to improve the... 30th March 2022 · 5 mins read
Latin America Economics Update Chile: tightening cycle not yet done and dusted The Monetary Policy Report released by Chile’s central bank today, following on from its 150bp rate increase to 7.00%, suggests that its tightening cycle is winding down to a close. However, we think... 30th March 2022 · 4 mins read
Latin America Economics Update Banxico’s hawkish tilt as Amlo slips up Yesterday’s unanimous vote by Mexico’s central bank to raise the policy rate by 50bp, to 6.50%, came as no surprise since it had already been revealed by President López Obrador (Amlo) earlier in the... 25th March 2022 · 3 mins read
Latin America Economics Update IMF & Argentina: a historical guide to restoring confidence History suggests that for an IMF deal to restore market confidence, a credible shift towards policy tightening which delivers positive economic results, alongside favourable external conditions, is... 23rd March 2022 · 5 mins read
Latin America Economics Update Copom opts for smaller hike, but keeps hawkish stance Brazil’s central bank slowed the pace of its hiking cycle with a 100bp hike (to 11.75%) yesterday, but the hawkish tone of the statement suggests that Copom is more concerned about the coming jump in... 17th March 2022 · 3 mins read
Latin America Economics Update Chile: Three key challenges facing President Boric Chile’s newly-inaugurated President Boric is inheriting a slowing economy which is likely to slip into a recession this year. But his government will still have to push through significant fiscal... 15th March 2022 · 5 mins read
Latin America Economics Update 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... 10th March 2022 · 4 mins read
Latin America Economics Update Why Argentina’s IMF deal is on shaky ground Argentina’s government reached a fresh IMF deal which, assuming it passes through Congress, will lead to a gradual shift towards more market-friendly policies. However, many of the economic... 8th March 2022 · 5 mins read
Latin America Economics Update Oil rally to help Colombia’s twin deficits The recent surge in oil prices means that Colombia’s twin current account and budget deficits are unlikely to be a major concern over the next couple of quarters. However, it will still require a... 3rd March 2022 · 5 mins read
Latin America Economics Update Signs of life in Venezuela’s oil sector Oil production in Venezuela has been showing signs of life, and there is probably scope for further gains in the near term. But it would require a lifting of sanctions and significant investment over... 21st February 2022 · 5 mins read
Latin America Economics Update High oil prices more harm than good for Lat Am Persistently high oil prices would bode ill for current account positions in much of Latin America, adding to the existing vulnerabilities in Chile. It would also keep inflation elevated, leading to... 16th February 2022 · 3 mins read
Latin America Economics Update Banxico: New Governor, same script The second successive 50bp hike by Mexico’s central bank (to 6.00%), in another 4-1 split on the Board, suggests that it is maintaining its hawkish stance under the new Governor Victoria Rodríguez... 11th February 2022 · 3 mins read
Latin America Economics Update Less to Brazil’s investment boom than meets the eye Fixed investment in Brazil rose at one of its fastest rates in the last 50 years in 2021 which, while a positive development, was driven by factors that are unlikely to be sustained. Fixed investment... 10th February 2022 · 4 mins read
