Latin America Economics Update Brazil’s current account improvement unlikely to last The narrowing in Brazil’s current account deficit over the past couple of years has been driven almost entirely by a recession-induced collapse in imports. As a result, the deficit is likely to widen... 17th November 2017 · 1 min read
Latin America Economics Update Further interest rate cuts likely in Peru The decision by Peru’s central bank to cut its policy interest rate – by 25bp to 3.25% – caught most by surprise but was in line with our forecast, and we expect further easing over the coming months... 10th November 2017 · 1 min read
Latin America Economics Update Cutting through the latest on PDVSA’s ‘default’ With Venezuela’s state-owned oil company having reportedly failed to make a principal payment on a bond that has now matured, credit default swaps are likely to be triggered on Friday. This is sure to... 9th November 2017 · 1 min read
Latin America Economics Update Argentine central bank has more work to do The decision by Argentina’s central bank to follow up last month’s surprise interest rate hike with another increase last night reinforces the view that policymakers are getting tough on inflation. We... 8th November 2017 · 1 min read
Latin America Economics Update Venezuela could be in default by end of the week As markets digest conflicting statements by Venezuelan policymakers about their plans for debt servicing, one point to emphasise is that both PDVSA and the government could fall into default by the... 6th November 2017 · 1 min read
Latin America Economics Update Huge challenges to Venezuela’s debt restructuring The announcement by President Maduro that Venezuela’s government plans to restructure its external debt essentially amounts to admitting that it will default in the coming weeks. While the exact... 3rd November 2017 · 1 min read
Latin America Economics Update Brazil’s BNDES reform slips under the radar The planned changes to the way that Brazil’s state development bank, BNDES, will set interest rates on its loans have passed under the radar but the macroeconomic effects could be significant. We... 2nd November 2017 · 1 min read
Latin America Economics Update Pushing down our BRL forecasts Most currencies in Latin America have weakened against the dollar over the past month, but the Brazilian real and Mexican peso have suffered particularly large falls as the political mood in both... 30th October 2017 · 1 min read
Latin America Economics Update One chart to watch for Argentine investors The performance of President Macri’s Cambiemos coalition in last weekend’s legislative elections has given a boost to reform hopes, but we can’t escape the feeling that investors are glossing over the... 26th October 2017 · 1 min read
Latin America Economics Update Argentina raises rates, leaves door open to further hikes The decision by Argentina’s central bank to hike its policy interest rate, when most analysts had been expecting the next move to be a cut, is an encouraging sign that policymakers are serious about... 25th October 2017 · 1 min read
Latin America Economics Update Over to you, President Macri The strong showing by President Macri’s Cambiemos coalition in yesterday’s legislative elections is likely to give a boost to local financial markets when they open later today. However, attention... 23rd October 2017 · 1 min read
Latin America Economics Update How far might the Mexican peso fall if Nafta collapses? We think the Mexican peso could initially fall to as far as 23/$ in the event that Nafta collapses. What happens to the currency beyond the initial sell-off would depend upon several factors, most... 18th October 2017 · 1 min read
Latin America Economics Update Peru’s central bank shrugs off inflation dip Peru’s central bank left its policy interest rate unchanged at 3.50% last night, and while there could be scope to ease policy a little further in the next 3-6 months, as things stand we expect rates... 13th October 2017 · 1 min read
Latin America Economics Update What would the collapse of Nafta mean for Mexico? The immediate effects of a collapse in Nafta on Mexico’s economy might be smaller than many expect – we would probably nudge down our GDP forecast for 2018 by something like 0.5-1.0%-pts. The effects... 12th October 2017 · 1 min read
Latin America Economics Update Mexico: mining downturn should soon bottom out We estimate that a fall in mining output shaved about 0.4%-pts off annual GDP growth in Mexico in Q3. Mining output should stabilise over the coming year, but we doubt that reforms to the sector will... 11th October 2017 · 1 min read
Latin America Economics Update Brazil’s property bubble deflates The deflation of Brazil’s property bubble appears in most regions to be happening via a stagnation in (nominal) prices, thus allowing prices and incomes in the rest of the economy catch up. This has... 10th October 2017 · 1 min read
