Economic Snapshot for Latin America
March 17, 2020
Regional growth prospects were slashed this month as the fast-spreading coronavirus wreaks economic havoc worldwide. Although activity is still seen strengthening somewhat this year, the outlook is bleak given the virus-inflicted disruptions to global supply chains and trade; downturn in commodity prices; volatility in financial markets; and stress to public health systems.
Latin America Monetary & Financial Sector News
Regional inflation slipped to 7.8% in February (January: 8.0%). Economic slack has largely kept price pressures contained in most countries of the region. The stark exceptions remain Venezuela and Argentina; notably, inflation in Argentina slowed to an over one-year low in February. Inflation is expected to subside ahead, though currency weakness represents an upside risk.
In March, Argentina’s monetary authority lowered the rate floor yet again to stimulate the economic recovery, while Peru’s Central Bank stood pat. Meanwhile, the recent global asset market turmoil and collapse of currencies across the region prompted the central banks of Brazil, Chile, Colombia, Mexico and Uruguay to intervene in the FX market.
Major regional currencies plummeted against the U.S. dollar recently amid the plunge in international crude prices and market panic over the spread of Covid-19 globally and its impact on economic activity, with the Brazilian real, Colombian peso and Mexican peso being the worst hit. Currencies are seen losing ground this year compared to 2019.
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Latin America Economic News
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Peru: Business sentiment at all-time low in March on coronavirus fears
April 3, 2020
The business confidence indicator dived from February’s 48.2 points to 21.8 points in March, amid mounting fears of a blow to the global economy from the coronavirus pandemic and associated containment measures.
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Chile: Economic activity picks up in February before imminent downturn in March
April 2, 2020
In February, the IMACEC economic activity index grew 2.7% on an annual basis, up from January’s 1.1% increase.
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Brazil: Manufacturing PMI plunges in March
April 1, 2020
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, fell to 48.4 in March from 52.3 in February, marking the sharpest deterioration in operating conditions since February 2017.
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Brazil: Industrial output moderates in February
April 1, 2020
Industrial production increased 0.5% on a month-on-month seasonally-adjusted basis in February, moderating from January’s revised 1.2% rise (previously reported: +0.9% month-on-month), but surprising market analysts who had expected a 0.4% decline in February.
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Mexico: Remittances gather pace in February
April 1, 2020
Remittances totaled USD 2.7 billion in February (January: USD 2.6 billion), representing a robust 10.5% increase from the same month in 2019 and following the 5.2% rise logged in January.
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