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A bumper jump in GDP, but signs of underlying weakness The breakdown of Brazil’s Q1 GDP figures suggests that the economy is not as strong as the staggering 1.9% q/q rise in output would suggest. Even so, the sharp rise in output has prompted us to revise …
1st June 2023
Growth in Chile’s economy accelerated at the start of the year, but the headline figure masks signs of pronounced weakness. We expect the economy to struggle over the coming quarters amid tight monetary policy and project a 0.3% contraction over 2023 as a …
18th May 2023
Copom to stay hawkish despite inflation decline The sharp fall in Brazilian inflation, to 4.2% y/y last month, was encouragingly broad based among the sub-categories of the CPI basket. But we think the central bank will want to see more evidence that core …
12th May 2023
A stronger finish to Q1 The surprisingly strong 1.1% m/m increase in Brazilian industrial production in March suggests that the economy fared a bit better than we’d expected in Q1. The risks to our GDP growth forecast for this year of 1.0%, which had …
10th May 2023
Inflation drops, but 25bp hike next week still more likely than not The drop in Mexico’s headline inflation rate, to 6.3% y/y in April, was broad-based and will provide some comfort to officials at the central bank that price pressures are finally easing. …
9th May 2023
Strength at start of 2023 unlikely to be sustained The 1.1% q/q rise in Mexican GDP in Q1 marked a pick-up from the end of last year, but a fresh slowdown is on the cards as a recession in the US and tight policy at home will take their toll. The outturn …
28th April 2023
Food inflation spike finally at an end The drop in Brazilian inflation to a 30-month low of 4.2% y/y in the middle of April was mainly a result of a sharp decline in food inflation, which is at its lowest rate since the start of the pandemic. With core …
26th April 2023
Fall in inflation unlikely to be enough to prevent a final 25bp rate hike The fall in Mexico’s headline inflation rate to an 18-month low of 6.2%y/y in the first half of April was broad-based and will provide some comfort to officials at Banxico that …
24th April 2023
Contraction in industry suggests Q1 was another weak quarter Brazilian industrial production fell for a third consecutive month in February and, while the latest surveys suggest that industry held up a bit better in March, the bigger picture is that Q1 …
19th April 2023
Brazil’s inflation drops sharply, but won’t sway the central bank The plunge in Brazilian inflation last month, to 4.7% y/y, was driven by a sharp decline in food inflation; core inflation remains high and the headline inflation rate is set to rise again …
11th April 2023
Pick-up in services inflation paves the way for final rate hike The further fall in Mexico’s headline inflation rate, to 6.9% in March, confirms that inflation is now on a clear downward trajectory. But services inflation is showing no signs of easing, …
5th April 2023
Early signs point to a weak Q1 The 0.3% m/m fall in Brazilian industrial production, coupled with the weakness of the latest surveys, suggests that it’s touch and go as to whether the economy contracted again in Q1. Even so, as the minutes to the March …
30th March 2023
Food inflation pushes headline rate down, but core pressures still strong The further decline in inflation in Brazil, to 5.4% y/y in the middle of this month, was driven by lower food inflation, but core price pressures remain very strong. As a result, …
24th March 2023
From Latin America’s growth star to weakest link The weaker-than-expected 0.1% q/q expansion in Chile in Q4 of last year confirms that high inflation and tight monetary policy are taking a heavy toll on the economy. We think the economy will contract by …
20th March 2023
Construction slump holds back industry Mexico’s industrial sector stagnated in January as a slump in construction output offset solid increases in output in other subsectors. Early evidence suggests that activity held up well last month but, with the US …
13th March 2023
Inflation continues to ease but fiscal risks to keep Copom in hawkish mood The further fall in Brazilian inflation, to 5.6% y/y in February, was driven mainly by a drop in food inflation. Core inflation pressures remain uncomfortably strong for the …
10th March 2023
Inflation edges down, but still a bit more tightening in the pipeline Mexico’s headline inflation rated edged down to 7.6% y/y in February but the further pick-up in services inflation will continue to worry policymakers at Banxico. We think that the …
9th March 2023
Struggling amid high interest rates The 0.2% q/q fall in Brazil’s GDP in Q4, which was driven by weakness in domestic demand, provides clear evidence that high interest rates are taking a heavier toll on the economy. Taken together with the softness in …
2nd March 2023
Drop in headline rate unlikely to assuage Copom’s concerns The fall in Brazilian inflation to 5.6% y/y in the first half of this month was driven by lower food inflation and won’t ease policymakers’ concerns about the strength of core inflation. We …
24th February 2023
Further rise in services inflation will keep Banxico in hawkish mood Mexico’s headline inflation rate edged down to 7.8% y/y in the first half of February but the further pick-up in services inflation will continue to concern policymakers at Banxico. We …
23rd February 2023
Strong 2022 to give way to a disappointing 2023 The stronger-than-expected 0.7% q/q expansion in Colombia’s GDP in Q4 confirms that the economy was a regional outperformer over 2022 as a whole. But the expenditure breakdown suggests that the economy …
15th February 2023
Rise in Mexican inflation paves the way for 25bp rate hike later today Mexico’s headline inflation rate edged up to 7.9% y/y in January, setting the scene for Banxico to raise interest rates by 25bp, to 10.75%, later today. We think that this will mark …
9th February 2023
Industry leads Brazil’s slowdown The stagnation in Brazilian industrial production in December is consistent with a 0.5% q/q fall in output over Q4 as whole, indicating that the sector was a drag on the economy. And the early signs are that January was no …
3rd February 2023
Economy now in a slowdown The 0.4% q/q rise in Mexican GDP in Q4 suggests that the economy held up better than its Latin American peers towards the end of last year. But even so, the economy in the midst of a slowdown, which we expect to worsen in the …
31st January 2023
Persistent price pressures may prompt more tightening from Banxico The small rise in Mexico’s headline inflation rate, to 7.9% y/y, in the first two weeks of January means that there is a growing risk that Banxico delivers a bit more tightening beyond the …
24th January 2023
Industry stagnated towards end of last year, 2023 to be tough Mexico’s industrial sector stagnated in November as higher construction and utilities output offset a slump in manufacturing and mining. More timely survey indicators have continued to hold up …
11th January 2023
Inflation still too high for Copom to breathe easily The higher-than-expected Brazilian inflation reading of 5.8% y/y last month, coming alongside growing fiscal concerns, will give Copom more cause to delay the start of its easing cycle. The outturn was …
10th January 2023
Inflation falls again, Banxico to end tightening cycle in February Mexico’s headline inflation rate was unchanged at 7.8% y/y in December but policymakers at the central bank will have taken comfort from the fact that core price pressures are finally …
9th January 2023
Industry stuck in the doldrums The 0.1% m/m fall in Brazilian industrial production in November and the weak surveys for December provide further evidence that the economy is in the midst of a slowdown. But the central bank will wait for further signs of …
5th January 2023
Big falls in inflation now behind us The Brazilian mid-month inflation figure for December was unchanged from the November full-month figure of 5.9% y/y, which provides an early sign that the big falls in inflation have now happened and it will be a much …
23rd December 2022
Fall in inflation paves the way for end of tightening cycle The second consecutive fall in Mexico’s mid-month inflation, to 7.8% y/y in December, confirms that inflation is now on a downward trajectory. This will allow Banxico to draw its tightening cycle …
22nd December 2022
Industry to struggle as US enters recession Mexico’s industrial sector posted a solid 0.4% m/m rise in output in October but the big picture is that industry has stagnated since the middle of this year. And while more timely survey indicators have held up …
12th December 2022
Inflation eases further, but Copom’s eyes are on fiscal risks The further fall in Brazilian inflation, to 5.9% y/y, last month will help to ease the squeeze on household incomes. But with the prices of many core goods and services still rising rapidly …
9th December 2022
Inflation drops back, but stronger core rate to prompt a bit more tightening Mexico’s headline inflation rate continued to drop back to 7.8% y/y in November but this was driven by weaker non-core inflation; core inflation actually strengthened further. We …
8th December 2022
A fleeting recovery The better-than-expected 0.3% m/m rise in Brazilian industrial production in October only partly reversed the falls in output in the previous few months. And surveys suggest that the sector fared much worse in November. This supports …
2nd December 2022
Slowdown now underway The weaker-than-expected Brazilian Q3 GDP growth figure, of 0.4% q/q, highlights that the weakening global economy and higher interest rates are bringing the recent period of strong growth to an end. And leading indicators suggest …
1st December 2022
Stronger core inflation will support the hawks at Banxico The further fall in Mexico’s headline inflation rate, to 8.1% y/y, in the first two weeks of November was driven by easing non-core price pressures. But core inflation picked up, which will …
24th November 2022
Teetering on the brink of recession The 1.2% q/q contraction in Chile’s economy in Q3 was even steeper than expected and we think that the downturn has further to run – our forecasts is for the economy to contract by 1.3% over 2023 as a whole. Meanwhile, …
18th November 2022
Strong Q3 to be followed by sharp slowdown The stronger-than-expected 1.6% q/q expansion in Colombia’s GDP in Q3 took output further above its pre-pandemic trend and means that Colombia is on course to be a regional outperformer in 2022. That said, there …
15th November 2022
Further fall in inflation won’t stop Copom from keeping policy tight The fourth consecutive decline in Brazil’s inflation rate, to 6.5% y/y in October, will be welcomed by policymakers at the central bank. That said, inflation is still well above target …
10th November 2022
Softer inflation gives Banxico food for thought, but 75bp hike on the cards Mexico’s headline inflation rate came in at a weaker-than-expected 8.4% y/y in October and, while this is unlikely to prevent Banxico from delivering another 75pb interest rate …
9th November 2022
Industry a drag on growth in Q3 The 0.7% m/m decline in Brazilian industrial production in September suggests that the sector made a negative contribution to GDP growth over Q3 as a whole. With other sectors faring surprisingly well, Brazil’s economy …
1st November 2022
Economy performed well in Q3, but tougher road lies ahead Provisional GDP figures show that Mexico’s economy expanded by a stronger-than-expected 1.0% q/q in Q3, but a recession in the US alongside tight fiscal and monetary policy mean that the economy …
31st October 2022
Copom to be relieved by inflation drop The drop in Brazilian inflation to an 18-month low of 6.9% y/y in the first half of October reinforces the view that the central bank’s tightening cycle is at an end. Even so, the strength of inflation in many core …
25th October 2022
Inflation drops back, but another 75bp hike still on the cards Mexico’s mid-month inflation reading of 8.5% y/y in October was a bit weaker than expected and, while core inflation edged up again, this was mainly driven by food products. With the Fed still …
24th October 2022
Industry soft and struggles set to continue Mexico’s industrial sector stagnated in August as weakness in the manufacturing, construction and utilities sectors was only offset by higher mining output. More timely indicators paint a mixed picture but, with …
12th October 2022
Inflation falls, but central bank will keep rates high for a long time The plunge in Brazil’s inflation rate to 7.2% y/y last month (from 8.7% in August) confirms that the central bank’s tightening cycle has ended. But with some goods and services …
11th October 2022
Inflation seems to have peaked, but Banxico to keep tightening for now Mexico’s headline inflation rate was unchanged at 8.7% y/y in September and will probably start to drop back over the coming months. But it will remain above the upper end of Banxico’s …
7th October 2022
Industry a weak spot in Q3 The 0.6% m/m fall in Brazilian industrial production in August wiped out July’s gains and the sector may have been a drag on the economy over Q3 as a whole. That said, the surprisingly strong surveys for other parts of the …
5th October 2022
Food and energy drag headline rate down further The fall in inflation in Brazil to a 16-month low of 8.0% y/y in the first half of September confirms that the monetary tightening cycle is over. By the same token, the fact that inflation remains very …
27th September 2022