Economic Snapshot for Latin America
September 12, 2019
The region’s growth prospects were chopped for a fifth consecutive month in September, chiefly on deteriorating expectations for Argentina, Chile, Mexico and Peru. Headwinds from global trade tensions, slowing activity in China, downbeat confidence, subdued commodities prices and Argentina’s crisis will limit momentum this year.
Preliminary data revealed regional inflation came in at 7.7% in August, slightly above July’s revised 7.6%. Weak economic dynamics has helped keep inflation in check in several economies, with the stark exceptions of Argentina and Venezuela. Regional inflation is seen ending the year around current levels.
Several central banks chopped interest rates in recent weeks against the backdrop of weak economic activity and moderate inflation. Policymakers in Brazil, Chile, Mexico and Peru all cut rates at their latest meetings. Meanwhile, amid a plunging peso and financial storm, Argentina’s officials unveiled capital controls in September to calm markets.
Argentina’s peso plummeted against the USD in August amid a confidence crash after President Macri lost the primary election by a wide margin. Spillover effects from Argentina’s crisis and general risk aversion hit nearly all of the rest of the region’s currencies, with Brazil’s real being particularly hard-hit. In September, however, most currencies regained some lost ground.
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Latin America Economic News
Argentina: Peso sell-off pushes inflation up in August
September 12, 2019
Consumer prices rose 4.0% over the previous month in August, coming in well above July’s 2.2% increase and ending a four-month streak of moderating price growth, according to the National Statistical Institute (INDEC).
Brazil: Retail sales pick up in July
September 10, 2019
Retail sales (excluding cars and construction) rose 1.0% from the previous month in seasonally-adjusted terms in July, which followed June’s revised 0.5% growth (previously reported: +0.1% month-on-month) and marked the best reading since November 2018.
Mexico: Inflation slides to near three-year low in August
September 9, 2019
Consumer prices slipped 0.02% from a month earlier in August, following the 0.38% month-on-month increase in July.
Argentina: Argentine peso records worst month in history in August following primary election shock
September 9, 2019
The Argentine peso plunged in August, due to the unexpectedly resounding victory of Macri’s rival, Peronist candidate Alberto Fernández, in primary elections held on 11 August.
Brazil: Inflation rises mildly in August
September 6, 2019
Consumer prices rose 0.11% in August over the previous month, which was below July’s 0.19%.
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