Brazil’s real GDP has risen for a fifth consecutive quarter; output is about 5% above pre-Covid level...
...But the balance of risks for 2023 is to the downside, due mainly to increased fiscal threats.
Policy uncertainty could keep interest rates high for even longer, and the global economy won’t help.
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
- Colombia’s President had a decent first 100 days in office, with the tax reform as a key achievement...
- ...But conflicting signals, between radicalism and orthodoxy, have hurt and will keep investors on alert.
- BanRep is likely to raise the policy interest rate further, owing to persistent price pressures.
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
- Mexico’s GDP likely rose marginally in July, but a modest downtrend will emerge soon.
- Argentina’s economy remained surprisingly resilient in H1, but the outlook has deteriorated rapidly.
- Inflation is rebounding, rates will continue to be hiked, and external conditions have worsened.
Andres Abadia (Senior International Economist)Latin America
- Brazil’s COPOM ends the tightening cycle, as inflation is finally cooling, thanks mainly to tax cuts...
- ...But it was a split and hawkish decision, and rate cuts won’t be on the table anytime soon.
- Inflation pressures persist in Mexico, particularly at the core level, but not for much longer.
Andres Abadia (Senior International Economist)Latin America
- Brazil — Lula’s lead over Bolsonaro holds
- Chile — What is next for the constitutional process?
- Peru — The new Finance Minister is taking action
Andres Abadia (Senior International Economist)Latin America
- Colombia's economic activity index confirmed that the recovery stalled in July, due to high inflation.
- Growth momentum will continue to peter out in the very near term; conditions likely will stabilise in Q4.
- The COPOM likely will keep the Selic rate on hold today, and throughout the remainder of the year.
Andres Abadia (Senior International Economist)Latin America
- Brazil’s economic growth was stronger-than-expected in early July, which will disquiet the COPOM...
- ...But still-high inflation and political uncertainty are already weighing on consumers’ spending.
- Argentinians will soon face triple-digit inflation, driven by rising input costs and the ARS sell-off.
Andres Abadia (Senior International Economist)Latin America
- Brazil — Hit by political noise and commodity prices
- Colombia — Orthodoxy is not enough to ease the pain
- Chile — Political questions not abating
Andres Abadia (Senior International Economist)Latin America
- Mexico’s industrial sector has remained relatively resilient, thanks chiefly to strength in manufacturing.
- Construction and mining/oil remain in the doldrums; AMLO’s policies are holding them back.
- The public finances remain the bright spot in Mexico, but next year's budget assumes too rosy an outlook.
Andres Abadia (Senior International Economist)Latin America
- Inflation in Mexico rose in August, meeting expectations, allowing Banxico to hike by 50bp this month.
- The inflation picture remains ugly in Chile, but the recession likely will push it down in Q4.
- The BCCh surprised markets by increasing the main rate by 100bp, but it adopted a neutral bias.
Andres Abadia (Senior International Economist)Latin America
- Inflation in Mexico likely hit a new multi-decade high in August, but likely conditions will improve soon.
- Inflation pressures in Peru are finally easing; the end of the BRCP’s tightening cycle is around the corner.
- Core inflation remains subdued, and a weakening domestic demand will help to push it lower in Q4.
Andres Abadia (Senior International Economist)Latin America
- The full reopening of the economy and further fiscal support have allowed Brazil to enjoy a solid H1.
- The recovery of the job market has also helped, off-setting the drag from high inflation and rates.
- Chile’s economy is in trouble and leading indicators tell a story of depressed conditions in H2.
Andres Abadia (Senior International Economist)Latin America
