Latin America Economics Update Argentina: fiscal monetisation to drive inflation higher There are some parallels between the money printing being undertaken by Argentina’s central bank (BCRA) and quantitative easing policies in the West. But in contrast to the developed economies... 18th October 2012 · 1 min read
Latin America Economics Update Colombian oil rush points to “twin-speed” growth Development of the Colombian oil sector will provide an important prop to economic growth over the coming years, but it is not unambiguously good news, particularly for non-commodity exporters. So... 17th October 2012 · 1 min read
Latin America Economics Update Peru keeps rates on hold as currency concerns resurface The Central Reserve Bank of Peru (BCRP) kept interest rates at 4.25% last night and is unlikely to make any changes to its benchmark rate until well into 2013. Concerns about the strength of the... 12th October 2012 · 1 min read
Latin America Economics Update Brazil rates on hold to 2014 Last night’s decision to cut Brazilian interest rates by 25bps to a new record low of 7.25% probably marks the end of the current easing cycle. But while most forecasters now expect the authorities to... 11th October 2012 · 1 min read
Latin America Economics Update Brazil's housing market: slowing but not stalling The surge in Brazilian property prices seen over the past few years appears to be slowing, but the housing market still looks significantly overvalued – perhaps by as much as 30-50%. In this month’s... 9th October 2012 · 1 min read
Latin America Economics Update Argentina Activity Indicator (Oct.) The Capital Economics Argentina Activity Indicator points to a slight improvement in Argentine growth over the past month or so. Even so, we think that GDP probably contracted by around 1.5% y/y in Q3... 9th October 2012 · 1 min read
Latin America Economics Update Chávez re-election to deepen Venezuela’s economic problems Hugo Chávez’s re-election as President of Venezuela is likely to result in a sharp sell-off in the bond market over the coming days and a 40-50% devaluation of the bolivar before year-end. More... 8th October 2012 · 1 min read
Latin America Economics Update Ecuador's oil-fired boom running out of steam The latest data confirm that Ecuador’s recent commodity boom has faded in 2012. With elections looming early next year, the main risk is that attempts to revive growth via looser fiscal policy will... 8th October 2012 · 1 min read
Latin America Economics Update Labour market reforms to help Mexican industry to outperform The announcement of labour market reforms in Mexico is a step in the right direction and should help to raise productivity growth over the coming years. That, along with Mexico’s already strong... 5th October 2012 · 1 min read
Latin America Economics Update Interest rates have further to fall in Colombia The Colombian central bank’s (BANREP) decision to keep interest rates on hold does not necessarily signal the end of the easing cycle, but it does suggest that further cuts may be punctuated by pauses... 1st October 2012 · 1 min read
Latin America Economics Update Manufacturing PMI adds to signs of a turnaround in Brazil The pick-up in September’s manufacturing PMI adds to recent evidence suggesting that policy stimulus is starting to take effect in Brazil. We suspect that the turnaround in the real economy will... 1st October 2012 · 1 min read
Latin America Economics Update Uruguayan rate hike will do little to tame inflation The Uruguayan Central Bank’s decision to hike interest rates by 25bps is unlikely to do much to tackle stubbornly high inflation. Strong price pressures are largely due to structural rigidities in the... 1st October 2012 · 1 min read
Latin America Economics Update Mexico hedges its bets, again The Mexican government’s decision to hedge its oil revenues for next year will keep the fiscal position on a stable footing in the near-term. Nonetheless, a heavy reliance on oil revenues casts doubt... 27th September 2012 · 1 min read
Latin America Economics Update Soybeans paper over cracks in Argentina’s growth model The rise in soybean prices since early June will limit any further downside to Argentine growth but is unlikely to set the economy up for the rapid rebound that many are predicting. In the absence of... 26th September 2012 · 1 min read
Latin America Economics Update Mexican credit growth to support outperformance In contrast to much of Latin America, which has undergone a credit-fuelled boom in recent years, bank lending in Mexico has been more restrained. As a result, while many countries in the region are... 25th September 2012 · 1 min read
Latin America Economics Update Colombian growth not as strong as it seems Second quarter GDP data from Colombia are not as strong as they seem at first sight. Almost all of the pick-up in growth to 1.6% q/q was driven by a sharp rise in construction output, which tends to... 20th September 2012 · 1 min read
