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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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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Mexico: Economy shrinks at fastest pace in over a decade in Q1 on initial coronavirus impact
May 26, 2020
The economy contracted at the steepest rate since the 2009 global financial crisis in the first quarter as the Covid-19 pandemic started to bite, with GDP falling 1.4% on an annual basis (Q4 2019: -0.7% year-on-year).
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Mexico: Exports crumble at record pace in April on Covid-19 hit
May 25, 2020
Exports collapsed 40.9% year-on-year in April as Covid-19 took its toll, following March’s 1.6% slip and marking the steepest fall since data collection began in the early 1990s.
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Argentina: Economic activity contacts at sharpest pace since May 2009 in March amid lockdown
May 21, 2020
The monthly indicator for economic activity (EMAE, Estimador Mensual de Actividad Económica) plunged 11.5% year-on-year in March (February: -2.4% yoy), marking the worst reading since May 2009.
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Peru: GDP falls at sharpest rate in 19 years in Q1
May 21, 2020
Economic activity shrank 3.4% year-on-year in the first quarter of the year, the fastest contraction since Q1 2001, after expanding 1.8% in Q4 2019. Hampered by Covid-19 fallout, the downturn was spearheaded by a severe contraction in the external sector, which subtracted 2.2 percentage points from the overall outturn (Q4: 0.0% year-on-year).
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