The fiscal tightening announced by Argentina's new administration this week is a step in the right direction but, with public discontent set to intensify, the government's commitment to fiscal discipline will soon be tested. In Chile, the likely rejection of the latest draft constitution in Sunday's referendum will bring investors clarity around the country’s legal framework, but may also increase the likelihood of future bouts of social unrest, Finally, despite the downward shift in US rate expectations, elevated services inflation mean that central banks in Latin America are likely to cut interest rates by less than most expect next year.
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