LatAm Outlook: Diverging Patterns

September 24, 2024 12:54 PM UTC

·       Brazil and Mexico started to diverge in terms of growth. While we see Brazil GDP growing above 3.0% in 2024 (pushed by the internal demand), we see Mexico’s growth decelerating to 1.3%, due to weaker demand from U.S. and contractionary monetary policy. In 2025, we see Brazil growing

Argentina GDP Review: 1.7% Contraction in Q2

September 19, 2024 1:38 PM UTC

Argentina’s GDP contracted by 1.7% in Q2 2024, marking three consecutive quarters of decline, largely due to Milei’s economic reforms. While agriculture grew by 80%, industry and consumption sharply declined. A 4.9% contraction is expected for 2024, with limited recovery in 2025, far below gover

Sep 27 Outlook Webinar: Rate Cuts But How Far?

September 15, 2024 10:30 AM UTC

    Uncertainty about whether the U.S. economy will have a soft or hard landing is growing as the market approaches Q4.  This is shaping the debate regarding the scale of easing through the remainder of 2024 and 2025 by the Fed.  European easing is underway, but how much further will central ba

Argentina CPI Review: 4.2% only in August

September 12, 2024 2:18 PM UTC

Argentina’s CPI rose 4.2% in August, surpassing market expectations, with Y/Y inflation falling to 236% from 260%. Public service tariff adjustments, particularly in Transport and Housing, were key inflation drivers. Food prices increased 3.5%, while goods CPI grew 3.2%, suggesting a slowing infla

Argentina: Economy Continues to Shrink

August 22, 2024 2:08 PM UTC

Argentina’s economy contracted by 0.3% in June (m/m), according to INDEC’s monthly activity indicator and, in quarterly terms, it will accumulate three consecutive quarter of contraction. Despite an 80% annual rise in agricultural activity due to base effects, other sectors like construction and

Argentina: CPI at 4.0% in July

August 15, 2024 2:52 PM UTC

Argentina's July CPI rose 4.0%, the lowest since January 2022, yet still above the 2% crawling peg, suggesting real exchange rate appreciation. Year-over-year CPI fell to 263% from 271% in June, with further declines anticipated. Despite some inflation reduction under Milei, price distortions and re

Argentina CPI Preview: Inflation Continues to Slowdown

August 13, 2024 12:57 PM UTC

On July 14 Argentina National Statistics Institute (INDEC) will release CPI data for July. Argentina's fiscal adjustment and zero ARS emissions strategy have eased inflation, reducing CPI growth from 20% in January to 3.5% in July. However, the crawling peg exchange rate policy and lack of internati

Argentina: Making Sense of the Three Stages Plan

July 26, 2024 2:51 PM UTC

The Central Bank of Argentina's plan for macroeconomic stabilization includes three stages: an orthodox fiscal exit, establishing an orthodox monetary framework, and prudently lifting FX controls. The fiscal deficit reduction has helped end the monetization of the deficit, while transitioning to a c

Argentina: Agriculture Drives Growth in May

July 19, 2024 1:10 PM UTC

The Argentine economy showed a 1.3% growth in May, driven mainly by the recovering agricultural sector, which is 100% higher than last year. However, other sectors like manufacturing and construction continue to lag. Despite the growth, economic recovery is uncertain due to fiscal adjustments, excha

Argentina: June CPI and Cleaning the Central Bank Balance

July 15, 2024 1:24 PM UTC

Argentina's CPI rose by 4.6% in June, up from 4.1% in May, missing market expectations of 5.1%. The Y/Y CPI fell to 271%. Housing items saw the highest increase at 14.2%, while core CPI growth slowed to 3.0%. Inflation may stabilize around 4.0% monthly. The Central Bank of Argentina's policies are m

Latin America: Country Risk Ratings

July 12, 2024 10:05 AM UTC

We provide country risk reviews for select Latin America countries including Argentina, Brazil, Chile, Colombia and Mexico. 

Argentina GDP: Economy Shrinks 2.6% in the First Quarter

June 25, 2024 2:16 PM UTC

Argentina's GDP shrank by 2.6% in Q1, entering a technical recession. Investments and consumption dropped significantly, while agriculture grew. This contraction, driven by Milei's economic policies, is expected to continue in Q2, with rising unemployment and poverty. A slightly recovery is anticipa

LatAm Outlook: Pausing the Cuts

June 24, 2024 6:00 PM UTC

·       Brazil and Mexico growth will decelerate from the growth rates in 2023. The stronger basis of comparisons in 2023 and the tight monetary policy will diminish growth during 2024. Brazil robust Agricultural growth will not repeat in 2023 while Mexico is on the limit of growing due to a

Argentina: Fourth Consecutive Month of Primary Surplus but It is Reducing

May 22, 2024 2:44 PM UTC

Argentina has delivered the fourth consecutive months of primary surplus. Most of this surplus comes from cutting the consumption of goods and services by the national administration and mainly by the pace of revenues growth which surpassed the growth of expenditures. However, the surpluses are redu

Argentina CPI Review: Monthly Inflation Drops to One Digit

May 15, 2024 12:18 PM UTC

Argentina's April CPI dropped to 8.8% after six months above 10%, with Y/Y CPI at 289%. Key rises included housing (+36%) and communication (+14.2%). Javier Milei's program and fiscal adjustments have reduced monetary emissions to zero, easing inflation. The Central Bank cut the policy rate to 40%.

Argentina: Activity is Shrinking but that is the Price to Stabilize

April 26, 2024 5:52 PM UTC

The INDEC data for February reveals a 0.2% economic shrinkage, signalling a 5.1% drop since August 2023, potentially leading to a Q1 2024 recession. High inflation and fiscal adjustments are primary causes. Some foresee 0% April inflation due to price realignment and stable ARS. Despite low reserves

Central and Latin America: Country Risk Ratings

April 18, 2024 9:00 AM UTC

We provide country risk reviews for Central America countries including Brazil/Mexico/Peru/Argentina/Cuba and El Salvador.  

Argentina CPI Review: Small Improvements Amid the Uncertainty

April 14, 2024 1:26 PM UTC

The INDEC's March CPI data reveals an 11.0% increase, down from February's 13.2%. Annually, Argentine CPI rose by 287% (Y/Y), with core CPI below 10%. Despite past shocks, we foresee continued monthly CPI slowdown. Argentina focuses on fiscal measures and on stabilize the exchange rate to accumulate

Outlook Overview: Europe in Focus, Then Elections Around the World

March 25, 2024 11:15 AM UTC

LatAm Outlook: Getting Deeper in the Cutting Cycle

March 22, 2024 7:04 PM UTC

·       Brazil and Mexico growth will decelerate from the growth rates seen in 2023. The stronger basis of comparisons in 2023 and the tight monetary policy will diminish growth during 2024. Brazil robust agricultural growth will not repeat in 2024, while Mexico growth is restrained by a tigh

Argentina CPI Review: Inflation Eases in February to 13%, but it Still a Long Road

March 13, 2024 8:09 PM UTC

The February CPI release by Argentina's INDEC shows a slight ease in inflation to 13.8% (m/m), yet on an annual basis, it has soared to 276%, hitting a record high since the 1980s. Major increases were noted in Transport (21%), Food and Beverages (11%), and Housing (20%). While indicating initial im

Argentina: CPI grows 20.6% in January

February 15, 2024 1:26 PM UTC

Argentina's CPI surged in January, marking a 20.6% increase (m/m), the highest globally. Annual figures show a staggering 254% rise. The rise was influenced by the exchange rate devaluation and the release of controlled prices. Only in April we will probably see a CPI cleaned from this noises. The g

Argentina: Milei’s First set of Laws Rejected in the Chamber of Deputies

February 7, 2024 12:53 PM UTC

JJavier Milei's ambitious deregulation laws for the Argentine economy faced rejection in the Chamber of Deputies, signaling challenges in negotiating with the current Congress. Milei's government must now revise its strategy, possibly focusing on less contentious issues. Despite setbacks, the govern

Argentina: Road to stabilization will be bumpy

January 24, 2024 9:38 PM UTC

Javier Milei's administration, despite securing an IMF deal, faces hurdles in stabilizing Argentina. Targeting a $10 billion increase in net reserves, equivalent to a quarter of the country's gross reserves, may prove overly ambitious. Contentious laws in Congress lack consensus, sparking opposition

Latin and Central America: Country Risk Ratings

January 22, 2024 10:00 AM UTC

We provide country risk reviews for Latin and Central America countries including Argentina, Brazil, Chile and Mexico.  

Argentina: Milei’s Emergency Decree Will Test Congress Support for His Agenda

December 21, 2023 1:58 PM UTC

After a day of subdued protests organized by social organizations, Javier Milei took to television to announce a series of measures aimed at deregulating the Argentine economy. Milei's objective is clearly to transition from a state-led economy to a pro-market economy as quickly as possible. His dec

EM FX Outlook: USD Decline v Inflation Differentials

December 19, 2023 9:59 AM UTC

·        In spot terms, we see the Indonesian Rupiah (IDR) and Malaysian Ringgit (MYR) rising against the USD as Fed rate cuts narrow interest rate differentials and a move away from an overvalued USD occurs.  Brazilian Real (BRL) and Mexican Peso (MXN) will likely be stable against the USD

LatAm Outlook: Diverging Paths in 2024

December 15, 2023 12:25 PM UTC

Our Forecasts
Risks to Our Views
Source: Continuum Economics
Brazil: Switching Back to Slow Growth?
Brazil growth has finally begun to decelerate (here), as the growth in the third quarter dropped to 0.1% (q/q). However, growth for 2023 is expected to stand at 3.2% (Yr/Yr) which is quite a bit higher th

Argentina: Tentative Shock Plan Announced

December 14, 2023 3:50 PM UTC

Figure 1: Argentina Exchange Rate (ARS/USD)Source: Refinitiv and MEF
Argentina's new Economic Minister, Luis Caputo, has unveiled the initial economic measures under Javier Milei's administration, focusing on addressing the root cause of Argentina's economic woes—the fiscal deficit. In a 16-minute

LatAm: Long Term Growth Differences

November 24, 2023 11:52 AM UTC

We see different patterns of growth for the Latin American countries. Brazil, Mexico and Argentina have different types of constraints that will define their long-term growth.
Figure 1: Annual GDP Growth
Source: Continuum Economics. *forecasts
We observe that the long-term growth trajectory for Brazil

El niño impacts on Latin America: a headwind for Brazil

November 22, 2023 11:30 AM UTC

El Niño is a climate pattern that makes Pacific Ocean waters warmer and, consequently, triggers extreme weather conditions in Latin America (LatAm) economies. However, its impacts among the LatAm countries varies. In some regions, this climate phenomenon causes severe droughts, impacting agricultur

Argentina: Javier Milei wins the Election, Uncertainty Mounts

November 20, 2023 1:26 PM UTC

Argentinians have elected Javier Milei to lead the country for the next four years, defying expectations set by most polls. Despite a marginal advantage predicted for either candidate, Milei secured a comfortable victory over Sergio Massa, obtaining 55.7% of the votes, while Massa gathered only 44.3

Argentina Elections Run-off: An Open Race

November 16, 2023 5:44 PM UTC

Argentina is poised for a crucial electoral decision on November 19, determining the occupant of the Presidential seat on December 10. The contest features the far-right Libertarian candidate, Javier Milei, against Sergio Massa, representing the ruling Peronist coalition. Polls present a divided out

Argentina CPI Review: Prices Freeze led to a slowdown on inflation

November 14, 2023 5:17 PM UTC

Figure 1: Argentina CPI by Groups (m/m, %)
Source: INDEC
The Argentina National Statistics Institute (INDEC) has recently released the Consumer Price Index (CPI) data for October. According to the data, Argentina's CPI witnessed an 8.3% month-on-month increase. Despite the elevated inflation levels fo

Argentina: Third Place Bulrich Announce Milei’s Support

October 26, 2023 3:13 PM UTC

Patricia Bullrich, the presidential candidate for 'Juntos por el Cambio' and the third-place contender in the elections, has recently announced her personal endorsement of Javier Milei. Notably, this decision stands independently from the stance of the remaining factions within the coalition. 'Junto

Argentina Elections: Massa Surprises and Will Dispute a Tight Run-off with Milei

October 23, 2023 4:03 PM UTC

Figure 1: Votes for President (%)
Source: La Nacion
On October 22, Argentina held its elections, yielding surprising results. Sergio Massa secured 37% of the votes, marking a significant 9-percentage-point increase from the national primaries, where he had gathered 28% support. The far-right candidate

Latin and Central America: Country Risk

October 18, 2023 9:23 AM UTC

Latin and Central America Regional Overview
During the last quarter, Brazil experienced a period of relative stability with no major significant events. President Lula has maintained his position of authority, while the opposition forces remain comparatively subdued. Some changes in the cabinet were

LatAm Outlook: Growth Continues

September 28, 2023 8:46 PM UTC

Our Forecasts
Risks to Our Views
Source: Continuum Economics
Brazil: Brighter than Expected
The Brazilian economy has surpassed expectations in the first half of this year. In the initial quarter, robust growth was predominantly driven by an exceptional surge in the agricultural sector, as soybean produ

Argentina: Pre-election Stimulus

August 29, 2023 7:41 AM UTC

Figure 1: Argentina Public Deficit (12-months sum, % of the GDP)
Source: INDEC, Mecon and Continuum Economics
The IMF has conducted a comprehensive review of its agreement with Argentina and granted approval for a disbursement of $7.5 billion, encompassing both the fifth and sixth instalments. This de

Argentina: Post Primaries Devaluation

August 22, 2023 1:32 PM UTC

Figure 1: Official and Black Market Exchange Rate (ARS/USD)
Source: BCAR and Refinitiv
Following the unexpected triumph of far-right candidate Javier Milei in the Argentine Primaries, a comprehensive set of measures has been unveiled by the Argentine Government. Notably, a 21% devaluation of the offi

Argentina Primaries: An Open Three Horses Race

August 14, 2023 8:12 PM UTC

Figure 1: Votes in the National Primaries for Presidency (%)
Source: La Nacion
Argentina's National Primaries Election took place on August 13th, serving as a crucial preliminary step in determining the final candidates for the upcoming general election scheduled for October 22nd. Currently, three mai

Argentina: New Staff Level Agreement with IMF Reached

July 31, 2023 2:27 PM UTC

Figure 1: Argentina Gross International Reserves (USD Bn)
Source: BCRA
Argentina has reached a new agreement with the IMF concerning their existing deal. The recent severe droughts have made it evident that the quantitative targets of the previous agreement would not be achieved, necessitating negotia

Argentina: Elections Shapes up

July 18, 2023 4:53 PM UTC

Argentina's upcoming election is taking shape, with Presidential candidates for the primaries now well-defined. The ruling coalition, now operating under the new name "Unión por la Patria," has nominated two candidates: Economy Minister Sergio Massa and youth leader Juan Grabois. On the other side,

LatAm Outlook: Lower Inflation and Growth above Expectations

June 21, 2023 9:27 AM UTC

Our Forecasts
Risks to Our Views
Source: Continuum Economics
Brazil: Higher Agricultural Production and Lower Inflation
The Brazilian economy experienced robust growth in the first quarter of 2023, with a notable expansion of 1.9% quarter-on-quarter (here). This growth was primarily driven by a remarkab

Argentina: Small Recover Delays the Recession Threat for Now

May 26, 2023 2:14 PM UTC

Figure 1: Argentina Activity Index (2019 = 100, Seasonally Adjusted)
Source: INDEC
The Argentine National Statistics Institute (INDEC) has released the estimation of its monthly activity indicator. The released data suggest that the Argentine economy has recovered during the first months of the year.