Polls suggest that centre-right candidate Daniel Noboa will win Ecuador's presidential election on Sunday, which would alleviate some of the pressure on the public finances. But we think it’s unlikely that debt sustainability will be restored. Meanwhile, spillovers from the Israel-Hamas war to Latin America have been limited. The main risk is an escalation that pushes oil prices up. That would benefit some countries (like Colombia) but would keep inflation and interest rates higher for longer. Finally, the surge in Mexico’s construction output poses an upside risk to our Q3 and Q4 GDP growth forecasts, but this strength looks unsustainable and the boom is likely to unwind next year.
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