Economic Snapshot for Latin America
May 21, 2020
The fast-spreading Covid-19 pandemic is set to push the region into its deepest recession in modern history this year
ThThe outbreak of the Covid-19 pandemic will usher in one of the worst contractions in history for the region this year. Prospects are dire amid the paralysis in domestic activity; collapse in prices for export commodities; massive job losses; pullback in remittances; rising debt vulnerabilities; and limited scope by governments to adequately respond to the crisis.
Latin America Monetary & Financial Sector News
Regional inflation declined to 6.7% in April (March: 7.5%), mainly on falling fuel prices. Subdued activity and lower non-core inflation have kept price pressures in check across the region recently. Argentina and Venezuela remain the notable exceptions, though inflation eased to a two-year low in the latter in March. Inflation is seen hovering around current levels ahead.
Major central banks in the region have axed rates to record or multi-year lows amid the Covid-19 fallout, with those in Brazil, Colombia and Mexico delivering further cuts over the past month. Monetary authorities have also launched a slew of measures to prop up liquidity in their financial systems. As a whole, regulators are seen further loosening policy ahead.
Most currencies across the region tumbled against the USD over the past month on sustained market fears over the economic fallout from Covid-19, with the Brazilian real hitting new record lows. The currencies of Colombia and Mexico held broadly stable, while the Chilean peso firmed. Currencies are expected to be battered this year, weakening more sharply than in 2019.
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5 years of Latin America economic forecasts for more than 30 economic indicators.
Latin America Economic News
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Chile: Economic activity plunges at the fastest rate on record in April.
June 1, 2020
In April, the IMACEC economic activity index sank 14.1% on an annual basis (March: -3.5% year-on-year), marking the largest drop on record as the measures to curtail the spread of Covid-19 ravaged the economy.
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Mexico: Manufacturing PMIs diverge but remain in dire conditions amid Covid-19 blow
June 1, 2020
The seasonally-adjusted manufacturing Purchasing Managers’ Index (PMI) produced by the Mexican Institute of Financial Executives (IMEF) fell deeper in negative territory from 41.0 in April to 39.2 in May.
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Argentina: Coronavirus blow to exports sharpens in April
May 28, 2020
Exports nosedived 18.9% in year-on-year terms in April, following March’s marked 15.9% slump.
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Brazil: Current account logs largest surplus on record in April
May 26, 2020
Brazil’s current account balance registered a surplus for the second month straight in April, swinging to a USD 3.8 billion surplus from a USD 1.9 billion deficit in April 2019.
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Mexico: Economic activity shrinks at fastest rate in over a decade in March
May 26, 2020
The monthly indicator for economic activity (IGAE) fell 1.3% in seasonally-adjusted, month-on-month terms in March, following February’s 0.6% slip and marking the worst decline since January 2009.
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