- Brazil’s economic recovery stalled in H2, after an impressive performance in previous quarters.
- Falling private consumption, due to tight financing conditions, has put the economy under strain.
- Bold rate cuts are still needed, assuming an improvement in external conditions and a better fiscal outlook.
Andrés Abadía (Chief LatAm Economist)Latin America
MONETARY POLICY NORMALISATION CONTINUES...
- ...DESPITE A BAD START TO Q1 FOR INFLATION, DUE TO EL NIÑO
Andrés Abadía (Chief LatAm Economist)Latin America
- Colombia’s economy managed to muddle through in Q4, thanks to the revival in consumption and capex.
- Leading indicators point to a better H1, though the recovery will remain subpar by previous standards.
- Tight financial conditions and still-elevated political/ policy uncertainty will limit the rebound.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: A poor end to the year, but the details are less grim than the headline.
Andrés Abadía (Chief LatAm Economist)Latin America
- At last Banxico has opened the door to interest rate cuts, as early as next month.
- Headline inflation has surprised to the upside recently, but due to the volatile non-core component.
- Core disinflation is on track and economic activity is slowing rapidly; Banxico is already behind the curve.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: Incompatible with prior data, but the downtrend is on track.
Andrés Abadía (Chief LatAm Economist)Latin America
- In one line: A terrible end to the year, but conditions will likely improve in Q1.
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
- BanRep delivered a cautious rate cut, as inflation risks remain tilted to the upside…
- …But there was unanimity among the Board on the need for further policy normalisation.
- We still think bolder rate cuts are coming, as inflation will start to fall rapidly and activity will falter.
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
- 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
- In one line: Disinflation continues; more good news to come.
Andrés Abadía (Chief LatAm Economist)Latin America
- Thursday’s triple threat of policy meetings in Brazil, Chile and Colombia is the main event this week.
- Will the rapid disinflation in Brazil allow the COPOM to accelerate the pace of easing this week?
- Similarly, in the Andes, policymakers will increase the magnitude of rate cuts, also thanks to rapid disinflation.
Andrés Abadía (Chief LatAm Economist)Latin America
