Economic Snapshot for Latin America
January 22, 2020
Next year’s growth prospects for Latin America were slashed for the fifth month running in December, with regional activity seen modestly picking up mainly on strengthening momentum in Brazil and Mexico. Argentina is poised to remain in recession for the third consecutive year. Heightened social tensions, policy uncertainty and tepid global demand cloud 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
Hong Kong: Inflation inches down in December
January 21, 2020
Inflation ticked down to 2.9% in December from 3.0% in November.
Colombia: Industrial production contracts in November
January 17, 2020
Industrial production fell 1.5% on an annual basis in November, contrasting October’s 2.2% expansion (previously reported: +2.1% year-on-year) and marking the lowest reading since March 2018 according to the Statistical Institute (DANE).
Argentina: New Peronist government hikes taxes and freezes prices in emergency bill
January 16, 2020
On 21 December, Congress approved an emergency economic reform package delivered by the new Peronist government led by Alberto Fernández.
Brazil: Economic activity quickens slightly in November
January 16, 2020
Economic activity rose 0.2% in seasonally-adjusted month-on-month terms in November, up from October’s revised 0.1% increase (previously reported: +0.2% month-on-month).
Colombia: Consumers turn less pessimistic in December
January 16, 2020
Consumers turned less pessimistic in December, with the Fedesarrollo consumer confidence index rising to minus 9.5 from minus 14.4 in November and marking the best reading in five months.
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