Economic Snapshot for Latin America
January 22, 2020
After a subdued 2019, regional growth is projected to gain some pace this year on stronger activity in heavyweights Mexico and, especially, Brazil. Rising domestic demand will underpin the overall expansion, helped by supportive monetary policy and improving sentiment. Still-lingering trade tensions, domestic policy uncertainty and social discontent remain key risks to the outlook.
Latin America Monetary & Financial Sector News
Regional inflation ended 2019 at a six-month high of 7.9% (November: 7.4%). Lackluster economic conditions have largely kept inflation in check in most countries of the region. The stark exceptions remain Argentina and Venezuela, while core inflation has proved sticky in Mexico. Inflationary pressures are seen subsiding further this year on modest activity growth.
The central banks of Brazil and Mexico continued to cut rates in December as inflation remained within target. Notably, Chile’s monetary authority stayed put to prevent further currency depreciation, while Argentina’s new policymakers lowered the rate floor again in January to stimulate the economy. Central bankers are seen loosening policy further this year.
Most of the region’s currencies appreciated against the U.S. dollar in recent weeks, supported by optimism over the “phase one” U.S.-China trade deal signed in mid-January. Meanwhile, Brazil’s real lost ground on weak economic data as did the Chilean peso on continued caution after last year’s protests. Currencies are seen weakening this year, albeit less so 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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Brazil: Real plunges to new record low in February
February 17, 2020
The Brazilian real continued its downward spiral in early February, hitting an all-time low of BRL 4.36 per USD on 12 February, marking an over 6.0% depreciation over the prior month.
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Peru: Economic activity closes 2019 on a sour note
February 17, 2020
In December, economic activity grew a puny 1.1% year-on-year, decelerating markedly from November’s already unremarkable 1.9% outturn and surprising market expectations on the downside.
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Brazil: Economic activity declines at quickest pace in 10 months in December
February 14, 2020
Economic activity fell 0.3% in seasonally-adjusted month-on-month terms in December, following November’s revised 0.1% decrease (previously reported: +0.2% month-on-month) and missing expectations of a softer 0.2% drop.
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Colombia: Growth softens slightly in Q4 but remains upbeat
February 14, 2020
According to a preliminary estimate released by the Statistical Institute (DANE) on 14 February, the economy lost some traction in the final quarter of 2019 but concluded a robust year overall nonetheless.
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Peru: Central Bank keeps rates at over nine-year low at February meeting
February 13, 2020
At its monetary policy meeting on 13 February, the Central Bank of Peru (BCRP) held the policy interest rate steady at 2.25%, the lowest point since July 2010.
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