Economic Snapshot for Latin America
January 19, 2021
Regional economic activity should bounce back this year as the gradual lifting of restrictions buttresses domestic and foreign demand . That said, the outlook remains clouded by several downside risks, including social unrest in several countries, elevated unemployment, deteriorated fiscal metrics, further flare-ups of the virus and a potentially slow vaccine rollout.
Latin America Monetary & Financial Sector News
Regional inflation held steady at November’s 6.1% in December, as higher increases in consumer prices in Brazil, Chile and Colombia offset somewhat softer price pressures in Mexico, Peru and Uruguay. This year, inflation should gain steam on the back of recovering economic activity and accommodative monetary policy stances.
Monetary authorities in Brazil, Chile, Colombia, Mexico, Paraguay and Uruguay held their benchmark rates steady at or near record lows at their December meetings, while the Central Bank of Peru also stood pat at its first meeting of this year. In 2021, central banks across the region are expected to maintain loose stances.
Most regional currencies weakened against the USD in recent weeks, most notably the Brazilian real and Colombian peso—the former due to concerns over the pandemic and public finances, as well as a slow reform agenda, and the latter owing to a drop in crude prices. Meanwhile, currencies in Chile and Mexico gained strength. Overall, currencies are seen depreciating ahead.
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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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Argentina: Softest decline in economic activity since February in December
February 25, 2021
On an annual basis, economic activity fell at a slower pace of 2.2% in December (November: -3.7% yoy).
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Mexico: Economic activity growth eases to seven-month low in December
February 25, 2021
The monthly indicator for economic activity (IGAE) ticked up 0.1% in month-on-month, seasonally-adjusted terms in December 2020, well below the 0.7% rise logged in the previous month and marking the softest increase since May 2020.
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Mexico: Economy contracts at softer annual pace than initially reported in Q4 2020
February 25, 2021
According to a second estimate released by the INEGI on 25 February, GDP contracted 4.3% on an annual basis in the final quarter of 2020 (Q3: -8.6% yoy), revised slightly up from the flash estimate of 4.5%.
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Argentina: Merchandise exports rebound in January
February 23, 2021
Merchandise exports expanded 7.3% in annual terms in January, strongly contrasting December’s 34.1% slump, which had the worst reading since September 2009.
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Argentina: Industrial output expands at faster pace in December
February 23, 2021
Industrial output grew 4.9% year-on-year in December, following November’s 4.3% drop and marking the strongest increase since February 2018.
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