Latin America Economics Weekly Brazil’s political crisis, Mexico’s austere budget It’s been a rollercoaster week in Brazilian politics and financial markets and, while investors have breathed a small sigh of relief in the past day or so, we think that they will be put under further... 10th September 2021 · 5 mins read
Latin America Economics Weekly Brazil’s recovery worries, hawks fly in Chile The disappointing economic data out of Brazil this week has cast some clouds over the economy’s recovery prospects. As it happens, we think that GDP growth will pick up quite strongly in Q3, but we’re... 3rd September 2021 · 7 mins read
Latin America Economics Weekly Brazil at breaking point, Argentina’s SDRs, Chile pensions Brazil’s institutional crisis took a turn for the worse this week, and points to an environment in which fiscal risks will grow and the economic reform agenda will be put on the backburner. Elsewhere... 27th August 2021 · 7 mins read
Latin America Economics Weekly More fiscal worries in Brazil, the regional re-opening Worries about a worsening of Brazil’s fiscal position in the run-up to next year’s general elections have continued to build, and we think there may now be a fiscal risk premium of about 50bp embedded... 20th August 2021 · 5 mins read
Latin America Economics Weekly Peru & Mexico hikes, Chile’s public spending spree Peru’s central bank, under the renewed stewardship of Governor Julio Velarde, started its tightening cycle yesterday with a 25bp rate hike, to 0.50%, and we think that rates will rise to 2.75% by the... 13th August 2021 · 7 mins read
Latin America Economics Chile GDP, central bank hawks, Brazil’s meteor This week’s strong activity data from Chile reaffirms our long-held optimism over its economic recovery, and will probably cause the central bank to adopt a more hawkish stance. Other central banks in... 6th August 2021 · 7 mins read
Latin America Economics Weekly Worrying signs from Castillo, regional re-opening The first steps from Peru’s newly-inaugurated President, Pedro Castillo, provide plenty of worrying signs for investors and suggest that local financial markets will remain on the back foot. Meanwhile... 30th July 2021 · 6 mins read
Latin America Economics Weekly Mexico’s Delta despairs, Bolsonaro’s giveaways The third virus wave currently underway in Mexico, driven by the contagious Delta variant, will probably weigh on activity this quarter. But, for now, we don’t think that it will derail the economic... 23rd July 2021 · 6 mins read
Latin America Economics Weekly Brazil’s tax reform, Chilean primary elections Proposed changes to Brazil’s income tax setup, which aim to cut corporate tax but only partly offset that with an end to exemptions and the introduction of a levy on dividends, add to the view that... 16th July 2021 · 5 mins read
Latin America Economics Unpacking Banxico’s minutes, Sinovac success? The fairly hawkish minutes to Banxico's last meeting, where it delivered a surprise 25bp hike, reaffirm our initial view that more tightening is in the pipeline. We now expect a further 125bp of hikes... 9th July 2021 · 5 mins read
Latin America Economics Weekly Fallen angel and a rising star Colombia’s second sovereign ratings downgrade to junk status was already largely priced in to local financial markets, but they could come under renewed pressure as public debt risks intensify over... 2nd July 2021 · 6 mins read
Latin America Economics Weekly Central banks turning hawkish, virus waves easing Latin American central banks are becoming increasingly hawkish, not just in Mexico (after yesterday's surprise rate hike), but also in Brazil and Chile. Colombia may soon join this club. While the... 25th June 2021 · 6 mins read
Latin America Economics Weekly Colombian fiscal can-kicking, Brazil electric(ity) shock Colombia’s government recently outlined plans for more moderate fiscal austerity, but this still looks implausible given the current political backdrop. Lingering fiscal risks will probably keep local... 18th June 2021 · 7 mins read
Latin America Economics Weekly Peru turmoil, Chile’s lockdown, hawks & doves Pedro Castillo’s victory in Peru’s presidential election caused local markets to tumble, but if his more moderate post-election comments are borne out in policymaking, asset prices are likely to... 11th June 2021 · 6 mins read
Latin America Economics Weekly Peru & Mexico elections, (another) Argentine default? A victory for left-wing populist Pedro Castillo in Peru’s presidential election on Sunday would probably send local financial markets into a tailspin, but we doubt that investors would have much to... 4th June 2021 · 6 mins read
Latin America Economics Weekly Banxico sets a high bar for hikes, new virus worries The minutes to Banxico’s latest meeting revealed that Board members are becoming more wary about the outlook for inflation, but we think that there is a high bar for a tightening cycle to begin... 28th May 2021 · 6 mins read
