Emerging Markets

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May 24, 2024

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Banxico Minutes: Unanimous Pause, Diverging Cuts
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May 24, 2024 9:24 PM UTC

Banxico maintained the policy rate at 11%, reflecting a cautious stance amid persistent inflation and economic uncertainty. The board was unanimous in this decision but divided on the timing of future cuts. Despite expectations for a rebound in economic activity, concerns about inflationary pressure

May 22, 2024

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

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Bank Indonesia Holds Firm on Rates: A Steady Hand for Currency Stability
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May 22, 2024 9:29 AM UTC

Bank Indonesia in a pro-stability move decided to maintain the key policy rate at 6.25% today. The move comes at a time when the wakness in the Indonesia Rupiah has abated and headline inflation has edged down. Despite improving stability, a rate cut is not in sight in the near term. 

May 20, 2024

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Mexico: Exports Loosing Traction
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May 20, 2024 2:38 PM UTC

At the beginning of the year, Mexico's exports are losing traction, stagnating as imports surpass exports. This could be due to adjustments to U.S. demand and inflation effects. With internal demand cooling and the U.S. economy decelerating, growth may shift to Mexico’s internal economy, bolstered

May 15, 2024

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Argentina CPI Review: Monthly Inflation Drops to One Digit
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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%.

May 14, 2024

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India Inflation Review: Sticky Prices to Keep RBI Cautious
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May 14, 2024 3:54 AM UTC

India’s consumer price inflation eased amrginally to 4.83% yr/yr in April, reflecting lower fuel and light prices. The government cut prices of LPG cylinders in India ahead of the elections. However, food price pressures persist despite various supply side measures, underscoring the sticky nature

May 13, 2024

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Watts at Stake: India's Looming Power Shortage
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May 13, 2024 6:58 AM UTC

India's power sector faces rising demand and power shortages, sparking fears of the most significant power shortfall in a decade. With coal imports continuing to rise and hydropower generation declining, India's aim to become a manufacturing hub could become challenging. Energy transition is likely

May 10, 2024

Benign Inflation Allows BNM to Hold Rate
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May 10, 2024 9:24 AM UTC

In its latest decision, the Monetary Policy Committee (MPC) of Bank Negara Malaysia (BNM) opted to keep the overnight policy rate (OPR) steady at 3.0%, marking the seventh consecutive meeting without a change. This decision aligns with market projections and underscores BNM's commitment to support g

May 09, 2024

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Mexico CPI Review: 0.2% Growth in April
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May 9, 2024 6:11 PM UTC

April's CPI data, despite a 0.2% m/m growth, reveals a significant y/y uptick to 4.6% from March's 4.4%, challenging norms due to electricity tariff adjustments. Core CPI maintained stability with a 0.2% increase, while Core Goods CPI rose by 0.3% and Services CPI by 0.1%, accumulating a 5.2% y/y gr

May 07, 2024

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Indonesia Q4 GDP Review: Robust Start to 2024
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May 7, 2024 1:22 PM UTC

Bottom line: Indonesia's Q1 GDP — released on May 6 — saw growth rebound to 5.1% yr/yr from 4.90% yr/yr in Q4 2023. While private consumption continued its ascent, government expenditure emerged as the key driver of Indonesia's growth narrative. Private consumption was supported by festive deman

May 03, 2024

Indonesia CPI Review: Inflation Inches Down but BI on Alert
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May 3, 2024 10:33 AM UTC

Indonesia’s consumer price inflation eased marginally to 3% yr/yr in April on the back of declining food prices. Despite the easing, food price remain the key inflationary factor. Additionally, imported inflation as the IDR comes under pressure could keep inflation elevated in the near term. Bank

May 02, 2024

Moody’s Improves Outlook Perspective Due to Higher Growth
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May 2, 2024 2:27 PM UTC

Moody’s upgraded Brazil's outlook to positive from stable, maintaining its Ba2 rating, signaling a potential move to Ba1 soon. Strong growth prospects, attributed to institutional reforms, drove this shift. Despite lingering doubts, improved fiscal conditions and anticipated tax reform are bolster

April 30, 2024

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Mexico GDP Review: 0.2% Growth but Still Subpar
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April 30, 2024 5:54 PM UTC

INEGI released Mexico's Preliminary GDP for Q1 2024, showing 0.2% growth, slightly above expectations. Annual GDP slowed to 2.0% from 2.8% in Q4 2023. The economy is losing momentum due to tight monetary policy and weakened U.S. demand. Agriculture contracted by 1.1%, Industry by 0.4%, while Service

April 29, 2024

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Mexico GDP Preview: Stagnation in the First Quarter
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April 29, 2024 5:22 PM UTC

INEGI will release Mexico's Preliminary GDP data, indicating 0% growth in Q1, likely due to stagnation in key sectors like manufacturing and construction. The service sector, hit hard by the pandemic, also shows signs of sluggishness. While recovery is expected, sustained poor growth raises concerns

Indonesia: MPC Review: Bank Indonesia Surprises With A Rate Hike
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April 29, 2024 11:26 AM UTC

In a pre-emptive move to both curb inflationary pressures and safeguard the Indonesia Rupiah (IDR) against furhter depreciation, Bank Indonesia, in a surprise move, increased its main policy rate by 25 bps to 6.25%. However, further rate hikes are not expected as the central bank remains wary of hur

April 26, 2024

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

April 24, 2024

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Brazil: Wage Inflation Will Likely Not Be a Big Deal
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April 24, 2024 3:19 PM UTC

Our analysis delves into recent trends in the Brazilian labor market, focusing on CPI and wage inflation. Utilizing a model akin to Ghomi et al. (2024) and Blanchard and Bernanke (2023), we dissect recent spikes in wage inflation and CPI growth. Notably, our findings suggest that recent wage spikes

April 23, 2024

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Indonesia: MPC Preview: Bank Indonesia to Hold Rate Despite Currency Volatility
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April 23, 2024 11:12 AM UTC

With inflation within target range and the need to defend the currency amid global uncertainties and US dollar strength, Bank Indonesia (BI) is likely to extend its pause on rate adjustments in the upcoming monetary policy meeting on April 24. BI remains committed to stabilising the Indonesian rupia

April 19, 2024

Mexico Elections: Sheimbaum Victory will likely mean a continuity of Current Government
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April 19, 2024 9:23 PM UTC

On June 2, Mexico will see historic general elections, marking the potential for its first female President. Claudia Sheinbaum of Morena and Xóchitl Galvés of PAN-PRI lead the race. Sheinbaum aims to continue Lopez-Obrador's legacy, while Galvés emphasizes social mobility. The polls show Sheimbau

April 18, 2024

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Brazil: Revision of Targets Shows the Weakness of the New Fiscal Framework
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April 18, 2024 1:39 PM UTC

The Brazilian government has revised its budget targets for 2025 and 2026, lowering the deficit to 0% and a 0.25% surplus in 2025 and 2026 respectively, from 0.5% surplus in 2025 and 1% in 2026. However, reliance on revenue increases poses challenges amid resistance from Congress. Despite reduced ta

April 14, 2024

Argentina CPI Review: Small Improvements Amid the Uncertainty
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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

April 09, 2024

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Mexico CPI Review: Slightly Below Expectations, with Concerns in Service
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April 9, 2024 6:43 PM UTC

Mexico's March CPI data, released by the National Statistics Institute, shows a slight increase of 0.29%, below the 0.36% expectation. Year-on-year CPI remains stable at 4.4%, above Banxico's 3.0% target. While fruit and vegetable prices dropped, transport costs rose. Concerns arise with Services CP

April 08, 2024

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Mexico CPI Preview: Well Behaved March
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April 8, 2024 1:10 PM UTC

On April 9th, Mexico's National Institute for Statistics will release March's CPI data. Forecast suggests a 0.4% rise, keeping YoY CPI stable at 4.5%, mainly due to base effects. Core CPI likely to remain steady at 4.5%, showing progress in disinflation despite non-alignment with Banxico's 3.0% targ

April 05, 2024

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Banxico Minutes: Hawkish Cut and Different Views
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April 5, 2024 2:18 PM UTC

Banxico's recent meeting minutes reveal a split among board members regarding monetary policy, with a 25bps rate cut to 11.0%. Despite progress in curbing inflation, differing views on policy direction persist. Inflation expectations deviate from targets, with potential risks in fiscal policy and wa

April 03, 2024

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Brazil: What About the Fiscal?
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April 3, 2024 2:31 PM UTC

In 2023, Brazil witnessed a significant fiscal decline, with the GDP surplus of 0.5% in 2022 turning into a 2.1% deficit, surpassing the targeted 0.5% deficit set by the new fiscal rule. Despite measures aimed at reinstating fiscal sustainability, immediate adjustments are unlikely. The deterioratio

April 01, 2024

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Indonesia CPI Review: Ramadan Demand Drives Up Inflation
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April 1, 2024 1:33 PM UTC

Indonesia's latest Consumer Price Index (CPI) data has revealed a notable acceleration in inflation, surpassing expectations and marking the highest rate since August 2023. The surge, driven primarily by heightened demand during the fasting month of Ramadan, highlights significant price pressures ac

March 22, 2024

LatAm Outlook: Getting Deeper in the Cutting Cycle
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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

March 18, 2024

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Bank Indonesia to Retain Policy Rate
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March 18, 2024 5:40 AM UTC

Bank Indonesia (BI) will likely maintain the key 7-day reverse repo rate unchanged in March at 6%, in line with recent trends. The stability of the rupiah remains a crucial consideration for BI, alongside CPI inflation, which has moderated within the new target band of 2.5+/-1%. 

March 13, 2024

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

March 08, 2024

Brazil CPI Preview: 0.7% in February will likely be only a Transitory Problem
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March 8, 2024 8:56 PM UTC

IBGE will release February's CPI data on Mar. 12, forecasting a 0.7% increase, driven mainly by education and food sectors. While some rises may persist, they're not indicative of a general price surge. Despite a 0.7% rise, Y/Y CPI is expected to drop to 4.4%, aligning with BCB targets. Forecasts su

March 07, 2024

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Mexico CPI Review: CPI Grew 0.1% in February
Freemium Article

March 7, 2024 10:16 PM UTC

The February CPI figures released by Mexico's National Institute of Statistics and Geography show a slight 0.1% increase, aligning with expectations. Year-on-year CPI dropped to 4.4%, ending a three-month rise. Food and Beverages notably fell by 1.3%, while Housing and Transports saw positive growth

March 04, 2024

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Mexico CPI Preview: Easing Inflation to Back March Cut
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March 4, 2024 1:21 PM UTC

INEGI will release February's CPI data, with an expected growth of only 0.1%. Despite this, the Y/Y index is forecasted to fall to 4.4% from January's 4.8%. Notably, Non-Core food CPI contracted by 3.9% in February, showing a reversal from January's rise. We anticipate a 0.3% increase in Core CPI, a

February 28, 2024

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Indonesia Preview: CPI to remain broadly stable
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February 28, 2024 3:29 PM UTC

Indonesia’s February inflation is likely to remain broadly stable. Food prices will maintain upward pressures but a tight monetary stance will keep headline inflation in check. Increased demand ahead of Ramadan could see prices spike in March. 

February 22, 2024

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Bank Indonesia indicates H2 easing
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February 22, 2024 11:07 AM UTC

In a bid to support the stability of the Indonesian economy and the rupiah, Bank Indonesia (BI) has opted to keep its benchmark interest rate unchanged at 6% in its latest monetary policy committee decision today (February 21). This decision aligns with BI's commitment to balance economic growth whi

February 15, 2024

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Argentina: CPI grows 20.6% in January
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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

February 13, 2024

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Brazil: Bolsonaro Closer to Facing Jail Time
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February 13, 2024 1:02 PM UTC

The Brazilian Supreme Court's action against Bolsonaro's inner circle, accusing them of undermining the rule of law and plotting against electronic voting, signals a potential turning point. Bolsonaro's popularity, despite legal challenges, underscores Brazil's divided political landscape. The upcom

February 08, 2024

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Mexico CPI Review: Unpleasant but It might be Transitory
Freemium Article

February 8, 2024 6:33 PM UTC

The CPI release for January by INEGI aligns with expectations, showing a 0.9% rise (m/m). This brings the Y/Y CPI to 4.9%, marking a third consecutive month of increase. Concerns may arise, but much of the rise stems from non-core items, possibly indicating transitory inflation. Banxico's strategy f

February 07, 2024

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

January 30, 2024

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Mexico GDP Review: Marginal Growth Points to Deceleration but the Outlook is still Bright
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January 30, 2024 5:34 PM UTC

The Mexican Economy experienced a slight Q4 deceleration, growing 0.1%, with Agriculture leading at 1.1%. Services were stagnant at 0%, but annual growth was positive, reaching 3.1% in 2023. The industrial sector propelled growth by 3.6%, aligning with nearshoring trends. Despite potential economic

January 26, 2024

Mexico: Lopez-Obrador Last Dance as President
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January 26, 2024 8:14 PM UTC

Andres Manuel Lopez-Obrador's presidency faced economic challenges, with limited pandemic support, but maintained fiscal prudence. Despite attempts to expand state presence, fiscal discipline paved the way for nearshoring. As his term concludes, Lopez-Obrador aims to secure seats for his party, MORE

January 25, 2024

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Mexico: FDI Increases 21% in 2023
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January 25, 2024 8:58 PM UTC

UNCTAD's preliminary estimates show a 9% decline in global Foreign Direct Investments to developing countries in 2023, contrasting with Mexico's exceptional 21% increase, likely due to nearshoring. Greenfield projects and expansion in the Mexico Industrial Park signal growth. While 2023's overall FD

January 24, 2024

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Argentina: Road to stabilization will be bumpy
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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

January 09, 2024

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Mexico CPI Review: Slight Uptick in December
Freemium Article

January 9, 2024 3:00 PM UTC

Figure 1: Mexico CPI by Groups (%, m/m)Source: INEGIThe National Institute of Statistics and Geography of Mexico (INEGI) has recently released the Consumer Price Index (CPI) data for December. The figures have exceeded expectations, surprising market participants. While a Citibamex survey anticipate

January 05, 2024

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Bank Indonesia Navigating the Path to Sustained Growth
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January 5, 2024 10:17 AM UTC

Delving into the components of CPI, the December easing is attributed to a multifaceted slowdown in both food and utility prices. Disinflationary pressures from household equipment, restaurants, and personal care items contributed to the overall dip. However, information and recreation prices exerte