The replacement of Colombia’s finance minister with a close ally of President Petro reinforces our concerns that fiscal policy won't be tightened sufficiently to stop the public debt ratio from rising, which could lead to a further increase in the country risk premium. We also published our latest Latin America Outlook this week. The key message is that the region faces a range of headwinds – not just US import tariffs, but also tight policy and worsening terms of trade – which underpin our view that GDP growth will undershoot consensus expectations over the next couple of years.
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