Latin America Economics Update Colombia cuts rates, more easing in store The statement accompanying the Colombian central bank’s decision to cut the policy rate by 50bp to 3.25% left the door open for more easing. Given the scale of the economic hit that we expect, the... 1st May 2020 · 3 mins read
Latin America Economics Update Latin American banks: where do the risks lie? Latin American banks are generally in good shape, but the sheer scale of the fall in output and limited policy responses to protect incomes in parts of the region mean that the rise in bad loans could... 29th April 2020 · 3 mins read
Latin America Economics Update The economic angle to Brazil’s (latest) political crisis Brazil’s economy is better placed to withstand a twin political and economic crisis than it was during the Dilma impeachment of 2015-16. But the brewing political mess could leave long-lasting damage... 27th April 2020 · 4 mins read
Latin America Economics Update Assessing the impact of low oil prices on Mexico The plunge in oil prices is yet another drag on Mexico’s freefalling economy, and may hasten a move by Pemex to restructure its external debts. The government’s lacklustre response to the economic... 22nd April 2020 · 3 mins read
Latin America Economics Update Five Q&As on Argentina’s restructuring proposal The Argentine government’s aggressive proposal to restructure its international bonds entails over $40bn in debt relief, which would go some way to restoring public debt sustainability. However, there... 17th April 2020 · 3 mins read
Latin America Economics Update Pemex default risks rising Our oil price forecasts are consistent with a 30% drop in Pemex’s revenues this year, which suggests the firm will need additional state support to service its large debts. However, with the... 16th April 2020 · 5 mins read
Latin America Economics Update What more can Chile’s central bank do? With the Central Bank of Chile’s policy rate at its effective lower bound, we think that its next easing measure would be a quantitative easing programme aimed at flattening the long end of the yield... 8th April 2020 · 4 mins read
Latin America Economics Update What do the latest surveys tell us? Last month’s survey data for Brazil and Mexico don’t capture most of the impact of the ramping up of social distancing measures in the second half of March, but they still suggest that both economies... 2nd April 2020 · 2 mins read
Latin America Economics Update Chile cuts rates, more easing in store Chile’s central bank suggested that, having cut its policy rate to 0.5% yesterday, rates will remain at this low level for an extended period of time. But given the scale of the economic hit from the... 1st April 2020 · 3 mins read
Latin America Economics Update Are Latin American policymakers doing enough? Policymakers in Peru and Chile have been quick to introduce economic policy and containment measures in response to the coronavirus, but peers elsewhere – particularly in Brazil and Mexico – have made... 31st March 2020 · 4 mins read
Latin America Economics Update The COVID-19 cost and Brazil’s public debt problem The cost of the coronavirus will push Brazil’s public debt ratio up sharply this year, to about 90% of GDP, and policymakers will have their work cut out to stabilise the debt trajectory in the... 30th March 2020 · 3 mins read
Latin America Economics Update Is Mexico sleepwalking into a crisis? Mexico’s economy is likely to suffer a similar fall in output this year as it did during the Tequila Crisis and the Global Financial Crisis. Despite its reticence, the government will ultimately have... 25th March 2020 · 4 mins read
Latin America Economics Update Gauging the impact of Lat Am currency falls The turmoil in Latin American currency markets will push up inflation, particularly in Brazil, Mexico and Colombia, and it already appears to have resulted in strains in corporate bond markets. One... 23rd March 2020 · 3 mins read
Latin America Economics Update BCB highlights limited space for policy response The Brazilian central bank’s (BCB’s) statement accompanying last night’s decision to cut the Selic rate by 50bp was surprisingly cautious and suggested that further easing isn’t on the cards. With the... 19th March 2020 · 3 mins read
Latin America Economics Update Tighter financial conditions a growing headwind Financial conditions have generally tightened more in Latin America (particularly Mexico) than in the rest of the emerging world in recent weeks. This presents another reason to think that activity... 18th March 2020 · 2 mins read
Latin America Economics Update Is Ecuador on the brink of default? The fall in oil prices has increased default risk in Ecuador. But given the government’s track record of fiscal austerity and the possibility of further multilateral financial support, the likelihood... 11th March 2020 · 3 mins read
