Argentina deregulates, Brazil’s tax reform, rate cuts

The past week saw a flurry of pro-growth reforms that could boost long-term growth prospects in parts of the region. In Argentina, President Milei took a first big step towards reducing the role of the state in the economy, while Brazil’s congress approved a long-awaited tax reform bill. But Milei’s plans face large implementation risks. And in Brazil, the tax bill doesn’t negate the need to tighten fiscal policy. Meanwhile, this week’s central bank decisions and communications revealed a slight dovish tilt, which poses a downside risk to our (relatively hawkish) interest rate forecasts for 2024.