The Argentinian economy is resilient, but the survey data tell a clear story of slowing growth in H1.
Households have been able to muddle through this year, but inflation is fast approaching 100%.
Deteriorating fundamentals suggest that the ruling coalition will lose the presidency in 2023.
Andres Abadia (Senior International Economist)Latin America
Economic activity remains relatively resilient in Peru, despite a deteriorating political backdrop.
Growth momentum will continue to slow over H1, due to high inflation and high interest rates...
...But the economy won’t collapse; relatively solid check-and-balances will prevent a nightmare.
Andres Abadia (Senior International Economist)Latin America
- In one line: Inflation continues to fall rapidly, for now.
Andres Abadia (Senior International Economist)Latin America
Inflation continues to fall rapidly in Brazil, but increased fiscal uncertainty remains a threat.
Headline inflation in Mexico surprised to the downside again in November, but the core remains sticky.
Softening demand, favourable base effects and high interest rates will push core inflation down soon.
Andres Abadia (Senior International Economist)Latin America
- Argentina’s inflation woes continue, despite a marginal improvement on a sequential basis.
- High indexation means more trouble ahead, offsetting the government’s efforts to control prices.
- The BCRA will be able to stay on the sidelines, for now, thanks to the less grim sequential data.
Andres Abadia (Senior International Economist)Latin America
- Brazil’s recovery continued in H2, but risks are tilted to the downside, due chiefly to high interest rates.
- Peru’s central bank increased interest rates last week, and left the door open to further tightening...
- ...But it will move to the sidelines soon, as inflation is finally falling, and economic activity stutters.
Andres Abadia (Senior International Economist)Latin America
- Industrial output in Mexico is edging lower, and the sector faces a cloudy domestic and external outlook.
- Tighter financial conditions and the weakening of the U.S. economy are key threats.
- Slowing manufacturing, falling inflation and the MXN rebound, will allow Banxico to hold rates in Q1.
Andres Abadia (Senior International Economist)Latin America
- The market is watching for signs of policy orthodoxy in Brazil as a new economic team is appointed.
- Inflation continues to fall rapidly, thanks chiefly to the lagged effect of tax cuts; will the downtrend continue?
- Retail sales firmed at the end of Q3, thanks mainly to falling inflation and a resilient job market.
Andres Abadia (Senior International Economist)Latin America
- Banxico stuck to the script and increased the main rate by 75bp, to push inflation expectations down…
- …But the tightening cycle will probably be over next month, as better news in CPI inflation keeps coming.
- Data this week confirmed that the inflation peak was in Q3; disinflation will consolidate during H1.
Andres Abadia (Senior International Economist)Latin America
- In one line: Disinflation continues, despite the overshoot to consensus.
Andres Abadia (Senior International Economist)Latin America
- Inflation in Chile is heading south, thanks to falling commodity prices and tighter financial conditions.
- Easing pressures in the pipeline suggest that inflation will continue to edge down over the coming months.
- Peru’s inflation is falling too, which likely will allow policymakers to move to the sidelines this week.
Andres Abadia (Senior International Economist)Latin America
- In one line: Undershooting expectations; a relief for the BCCh.
Andres Abadia (Senior International Economist)Latin America
- Mexico’s economy was resilient in Q3, despite weakening sectoral and survey data.
- But the good news won’t last; still-high inflation and tighter financial conditions remain threats.
- Most importantly, a weakening U.S. economy, hitting manufacturing and remittances, is a huge risk.
Andres Abadia (Senior International Economist)Latin America
- Inflation in Brazil continued to fall rapidly in early Q4, but the COPOM won’t have it easy anytime soon.
- Mexico’s economic activity rebounded sharply in August, but this is in stark contrast to sectoral data.
- Growth momentum will slow soon, as fundamentals have deteriorated consistently in recent months.
Andres Abadia (Senior International Economist)Latin America
- Headline inflation in Mexico probably peaked in Q3, and we expect it to edge down in the near term.
- Core inflation remains sticky, but not for long, as the economic recovery stutters and shocks finally fade.
- Brazil’s external accounts remain resilient, providing a cushion against uncertainty elsewhere.
Andres Abadia (Senior International Economist)Latin America
- Consumers’ spending in Mexico is under pressure, due to high inflation and increased interest rates.
- Leading indicators point to a challenging Q4, but conditions will stabilize next year.
- Argentina’s economy remained surprisingly resilient in August, but it probably will stall soon.
Andres Abadia (Senior International Economist)Latin America
- Economic growth in Brazil undershot expectations in August, due mainly to tight financial conditions.
- Downside risks to growth have gathered, but we expect the economy to remain resilient in Q4.
- Argentina’s inflation nightmare continues; high indexation and inertia mean more trouble ahead.
Andres Abadia (Senior International Economist)Latin America
- Inflation in Brazil continued to fall rapidly in September, thanks to the lagged effect of tax cuts.
- Softening domestic demand and tighter financial conditions are also helping to bring inflation down.
- This is bringing comfort to policymakers, but high fiscal uncertainty will limit the room for manoeuvre.
Andres Abadia (Senior International Economist)Latin America
- August’s inflation data in Mexico and Chile brought a sigh of relief to policymakers...
- ...But core inflation remains sticky, overshooting their forecast; a slowing economy will bring it down in Q1.
- We think Peru's BCRP wrapped up the tightening cycle last week; the BCCh will stay on hold this week.
Andres Abadia (Senior International Economist)Latin America
