- In one line: A terrible end to the year, but conditions will likely improve in Q1.
Andrés Abadía (Chief LatAm Economist)Latin America
- Brazilian Real — Fundamentals supportive
- Colombian Peso — Shielded by high carry
- Chilean Peso — Lower carry still the key drag
Andrés Abadía (Chief LatAm Economist)Latin America
- Brazil’s industrial sector is strengthening, but the devil is in the detail; bold rate cuts are needed.
- The external balance improved substantially last year as exports were resilient and imports struggled.
- The minutes of the last policy meeting point to a cruising speed of 50bp rate cuts in the near term.
Andrés Abadía (Chief LatAm Economist)Latin America
- Chile’s BCCh cut the policy rate by 100bp to 7.25%, with one member voting for a bigger reduction.
- The Board increased the pace of easing as inflation is falling rapidly and the economy is struggling.
- The worst for the economy is over, but temporary shocks—including bad weather—remain drags.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: Industrial sector ends 2023 on a strong note.
Andrés Abadía (Chief LatAm Economist)Latin America
INFLATION CONTINUES TO FALL AND GROWTH IS SLUGGISH...
- ...ALLOWING GRADUAL INTEREST RATE CUTS
Andrés Abadía (Chief LatAm Economist)Latin America
- Rapid disinflation is allowing LatAm central banks to normalise monetary policy, but speeds differ.
- Brazil’s COPOM cut rates at a cautious 50bp pace, but we still see room for bolder cuts if the Fed blinks.
- The unemployment rate ended Q4 on a decent footing, but we see a slowdown in job creation in H1.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: A poor end to the quarter, highlighting the need of further rate cuts.
Andrés Abadía (Chief LatAm Economist)Latin America
- A cautious cut, but bolder action likely will come soon.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: A 50bp rate cut, as widely expected.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: A soft end to the year, and H1 looks difficult; rate cuts are needed.
Andrés Abadía (Chief LatAm Economist)Latin America
- Real GDP growth in Mexico surprised to the down-side in Q4; tighter financial conditions are hurting.
- will be difficult in H1, with less support from the global economy and Banxico still cautious.
- Chile’s labour market performed well in December; further interest rate cuts will support the upturn.
Andrés Abadía (Chief LatAm Economist)Latin America
- In December, Mexico saw its biggest trade surplus since the pandemic, and the oil trade deficit stabilised.
- Auto exports improved at the margin in Q4, but down- side risks remain, due to sluggish external conditions.
- Will the strength of the labour market in 2023 continue over the coming quarters?
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: Disinflation continues; more good news to come.
Andrés Abadía (Chief LatAm Economist)Latin America
- Economic activity in Mexico is struggling, particularly manufacturing and key services, as demand eases.
- The ongoing weakness of global conditions and high real interest rates will constrain growth during H1.
- Bad weather has foiled a promising disinflation story, though core pressures continue to ease rapidly.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: Poor economic activity and soft core inflation pressures.
Andrés Abadía (Chief LatAm Economist)Latin America
- The IBC-BR for November shows Brazil’s economy is stagnating, despite rapidly falling inflation.
- Tight financial conditions will continue to keep a lid on activity, offsetting the boost from fiscal support.
- Business surveys are improving, signalling better momentum in Q2, if the COPOM acts boldly.
Andrés Abadía (Chief LatAm Economist)Latin America
- Colombia’s economy performed relatively well in November, and the outlook is improving; just.
- S&P lowered the country’s outlook to ‘negative’ from ‘stable’ due to the sluggish economic growth.
- A rating downgrade will likely be avoided, but President Petro’s policy missteps are a real threat.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: Undershooting expectations, by some way.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: Struggling, despite relatively positive sectoral data in November.
Andrés Abadía (Chief LatAm Economist)Latin America