Rising export prices continue to support growth, but they are also driving higher-than-expected inflation.
Global inflation pressures from food and energy will keep restrictive bias on monetary policy.
Most countries will continue to tighten, despite the absence of domestic demand-driven inflation.
Andres Abadia (Senior International Economist)Latin America
Banxico delivered another bold rate hike, and their tone has turned even more hawkish.
Inflation continues to head north in Brazil, due mainly to the effect of global supply shocks.
Further rate hikes will help to reduce inflation expectations, but will bring the economy to its knees.
Andres Abadia (Senior International Economist)Latin America
- Argentina's economic recovery consolidated in H2, but the near-term outlook is negative.
- Inflation is rising rapidly, and inflation expectations are heading north; rates will be hiked further.
- The IMF plan has been approved, averting the worst-case scenario, but challenges remain.
Andres Abadia (Senior International Economist)Latin America
- Peru's economy ended the year on a soft note, but the details show that domestic demand is rising.
- Momentum however, will ease over H1, on the back of high inflation and tighter financial conditions.
- Argentina's central bank tightens monetary policy further, but more will have to be done.
Andres Abadia (Senior International Economist)Latin America
- Inflation pressures in Argentina remained elevated at the start of Q2, despite a modest slowing.
- Indexation and the weak ARS will hold inflation up over the coming months, despite price controls.
- An agreement with the IMF likely will emerge soon, but erratic policies will continue to sap confidence.
Andres Abadia (Senior International Economist)Latin America
- Commodity prices continue to rebound, which will help to ease LatAm's risk profile in the near term.
- The threat of a Russia-Ukraine war is supporting prices, but downside risks remain.
- High actual inflation and rising inflation expectations will force the BCRP to continue to tighten.
Andres Abadia (Senior International Economist)Latin America
- Brazil — A robust start to the year, but risks prevail
- Chile — A potential orthodox Boric appeases investors
- Peru — The rebound continues, despite politics
Andres Abadia (Senior International Economist)Latin America
- Brazil — Bolsonaro's support hits fresh lows
- Mexico — AMLO's nationalism gathers speed
- Colombia — A busy election cycle starts
Andres Abadia (Senior International Economist)Latin America
- LatAm equities will struggle in the first half, due to an array of issues, particularly political risk.
- Conditions likely will improve in H2, as some shocks fade, but momentum will remain subdued.
- Tighter U.S. financial conditions will hurt the region, temporarily, but a rebound likely will the follow.
Andres Abadia (Senior International Economist)Latin America
- Brazil — Expect increased volatility in 2022
- Mexico — The rally likely will falter soon
- Argentina — Macro risks are too high
Andres Abadia (Senior International Economist)Latin America
Banxico tightened boldly yesterday as inflation continues to rise rapidly, pushing expectations higher.
Chile's central bank increased the main rate on Tuesday, and suggested that more is to come.
Colombia's BanRep will follow suit today, and likely will introduce a clearer hawkish tone.
Andres Abadia (Senior International Economist)Latin America
- Mexico: A decent recovery ahead, but risks abound.
- Colombia: Politics will limit the rebound in Q1
- Chile: Near-term volatility driven by politics.
Andres Abadia (Senior International Economist)Latin America
Sunday's run-off between leftist Gabriel Boric and the right-win JoseÌÂ Antonio Kast is anyone’s race.
Polls suggest that Mr. Boric will win, by a small margin; if this is the case, markets won't be happy.
We expect challenging times ahead, but conditions will improve as his presidency progresses; we hope.
Andres Abadia (Senior International Economist)Latin America
The Mexican industrial sector started Q4 quite strongly, but the sector is still struggling.
Conditions likely will improve next year, as the chip crisis fades, but other drags will constrain activity.
Peru's central bank continues to normalise mone- tary policy; more is coming.
Andres Abadia (Senior International Economist)Latin America
- Brazil — Unstable political environment persists
- Colombia — Dissatisfaction is driving the undecided
- Chile — Will the country move to the left or right?
Andres Abadia (Senior International Economist)Latin America
- The midterm election result in Argentina has diminished the chances of a Peronist second term.
- The ruling coalition, FdT, has lost the Senate; it will have to negotiate with JpC to implement key policies.
- The economy will continue to suffer in the near term; a deal with IMF is badly needed.
Andres Abadia (Senior International Economist)Latin America
- Brazil — Legal storm clouds gather over Bolsonaro
- Mexico — AMLO's power reform is a big threat
- Chile — The election race enters its final stage
Andres Abadia (Senior International Economist)Latin America
