Mexico CPI Preview: Stabilization on August

September 5, 2024 4:39 PM UTC

Mexico’s August CPI is expected to remain flat at 0%, with year-on-year inflation dropping to 5.0% from 5.5% in July, driven by a contraction in non-core CPI. Core CPI is projected to rise by 0.2%, bringing its year-on-year figure to 3.9%. This trend may give Banxico more confidence to resume inte

Indonesia CPI Review: Food Price Pressures Ease

September 3, 2024 10:12 AM UTC

Easing food inflation saw headline CPI decline to 2.12% yr/yr in August. Nonetheless, price pressures from a weakening IDR persist. Bank Indonesia will likely hold rates till Q4-2024. 

India GDP Review: A Sobering Start to FY25

September 1, 2024 1:53 PM UTC

India’s GDP growth slowed to 6.7% yr/yr in Q1 FY25, falling short of expectations, as reduced public spending during the election period weighed on economic activity. Strong private consumption and investment provided some support, but a decline in manufacturing growth and weak external trade damp

Mexico: Inflation Report Shows Confidence in Cuts

August 29, 2024 2:08 PM UTC

Banxico's latest report reveals a weaker growth outlook, with a 2024 forecast cut to 1.4% and further weakening expected in 2025. Despite rising non-core CPI, inflation remains controlled. Banxico is likely to continue rate cuts, aiming for a year-end policy rate of 10.25%, amid moderate inflation c

Indonesia's Election Law Drama: Court Rulings and Political Fallout

August 27, 2024 6:57 AM UTC

In a dramatic turn of events, Indonesia's parliament abandoned its plan to amend electoral laws. The parliament had recently planned to amend the country's electoral laws, aiming to overturn pivotal decisions by the Constitutional Court. The proposed changes, which have sparked widespread controvers

Hajj Surge and Trade Squeeze Drive Indonesia's Q2 Deficit Higher

August 26, 2024 6:58 AM UTC

Indonesia's current account deficit widened to US$ 3.0bn in Q2 2024, driven by a higher services deficit from increased Hajj travel and a narrowing trade surplus. Strong portfolio investment inflows helped offset some pressures, but FDI inflows fell sharply. The H1 deficit reached US$ 5.4bn, up from

Banxico Minutes: Cuts on the Table, Divided Board

August 23, 2024 1:02 PM UTC

Banxico has resumed its rate-cutting cycle, reducing the policy rate from 11% to 10.75%, with a split board decision. Most members noted weakening domestic activity and external volatility impacting the exchange rate. While some view the rise in non-core inflation as transitory, others see it, along

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

Mexico: FDI Increases but No Sign of Nearshoring

August 21, 2024 2:50 PM UTC

Mexico's FDI reached USD 31 billion in the first half of 2024, a 7% increase from 2023. However, this figure may be inflated by not accounting for USD inflation, potentially reducing real growth. While nearshoring discussions continue, current FDI largely reflects reinvestment by existing foreign fi

Indonesia's 2025 Draft Budget: A High-Stakes Gamble on Growth and Subsidies

August 20, 2024 6:24 AM UTC

Indonesia's 2025 budget is a high-risk gamble, with potential for the fiscal deficit to breach the 3% of GDP legal threshold. The ambitious revenue targets and planned spending cuts pose significant challenges, particularly in a low commodity price environment. The reliance on optimistic tax revenue

Mexico: Moving Towards Deficit as Expected

August 16, 2024 8:10 PM UTC

Mexico's fiscal situation is becoming challenging, with a primary deficit emerging due to increased support for PEMEX and overestimated growth projections. The Debt/GDP ratio is expected to rise to around 50.8% by 2024, possibly stabilizing around 49-54% depending on fiscal consolidation efforts. Wh

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

Despite Favourable Metrics RBI Committed to Tightening

August 11, 2024 5:03 PM UTC

The RBI will retained its stance of withdrawal of accomodation and maintained benchmark rate of 6.5% in its August meeting, staying on the path of inflation target. Concerns around high food inflation and geopolitical instability ensured that the RBI remained committed to its monetary tightening sta

Mexico CPI Review: Food Prices Lead the 1% Rise

August 8, 2024 1:56 PM UTC

Mexico's CPI rose by 1.0% in July, pushing the year-over-year rate to 5.6%, the highest since November 2021. The increase was driven by a 1.9% rise in food and beverages due to drought and exchange rate impacts. Non-core inflation surged by 3.3%, widening the gap with core inflation. Given these ris

Brazil CPI Preview: Inflation to Rise in July

August 5, 2024 3:13 PM UTC

The Brazilian CPI is expected to rise by 0.3% m/m in July, pushing Y/Y CPI to 4.4%. This increase is mainly due to higher gasoline prices affecting the Transport and Housing groups. Inflationary risks are emerging, with strong economic activity and sticky service inflation, but a policy rate cut rem

Indonesia Q2 GDP Preview: Slight Easing After a Robust Start

August 4, 2024 8:00 PM UTC

Bottom line: Indonesia's Q2 GDP growth is expected to ease to 5% yr/yr. While government consumption is expected to have remained stable, moderation in Indonesia's external sector will hold growth back. Additionally, with no longer the boost from festive demand, private consumption is also expected

Mexico GDP Review: Slow Growth in Continues

July 30, 2024 4:22 PM UTC

Mexico's GDP grew by just 0.2% in Q2 2024, with Industry and Services up 0.3% but Agriculture down 1.7%. The economy shows signs of deceleration, especially in agriculture due to extreme climate conditions, despite rising wages. The detailed data is pending, but a slowdown in investment and consumpt

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

Mexico: Mixed Signs for Banxico

July 25, 2024 1:52 PM UTC

The Mexican economy shows mixed signals for Banxico. Economic activity indicates a slowdown, with weaker industrial activity and decelerating formal employment. However, inflation is rising, particularly in non-core components like energy and agricultural goods, influenced by climate conditions. The

Brazil: An Eye on the Lower Bound of the Fiscal Target

July 23, 2024 4:07 PM UTC

The Brazilian government will implement BRL 15 billion in contingency expenditures to meet fiscal targets, aiming for a 0.25% GDP primary deficit in 2024. This move, though addressing fiscal issues, pursues the lower target band and may undermine fiscal credibility. The contingency is due to revenue

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

Stable Rupiah, Steady Growth: Inside Bank Indonesia's Latest Rate Decision

July 17, 2024 1:13 PM UTC

Bank Indonesia held its key interest rate at 6.25% to stabilize the rupiah and attract FX inflows, while maintaining interventions in the FX and bond markets. Inflation remains within target, and GDP growth forecasts are steady. Future rate cuts depend on US Federal Reserve actions. A 25bps cut is e

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

Banxico Minutes: More Slack Could Give Room for Rate Cuts

July 12, 2024 2:43 PM UTC

Banxico kept the policy rate unchanged at 11.0% but showed a slightly dovish tone, hinting at possible cuts in August. June's CPI figures revealed a widening gap between core and non-core inflation. Despite recent economic slowdowns and the MXN Peso's depreciation, Banxico expects economic slack to

India CPI Preview: Weather Disruptions to Propel Headline Inflation

July 11, 2024 7:49 AM UTC

Bottom line: India’s June inflation level is expected to trend up to 4.9% y/y, rising from 4.7% y/y in May, reflecting higher food prices. The persisting heatwaves and the advance of the monsoon and its impact on produce will weigh on food prices in the near term, which could potentially see price

Mexico CPI Review: 0.38% Inflation in June

July 9, 2024 7:46 PM UTC

INEGI reports Mexico's CPI rose 0.38% in June, above expectations. Year-over-year CPI increased to 5.0%, with core CPI at 4.1% and non-core CPI at 7.7%. Non-agricultural goods drove the rise, raising concerns about inflation due to climate-related agricultural shocks. Food and beverages saw the high

Softening inflation will provide BI room to hold rate

July 2, 2024 1:36 PM UTC

Bank Indonesia in a pro-stability move decided to maintain the key policy rate at 6.25%. The move comes at a time when the weakness in the Indonesia Rupiah has increased in recent weeks. A rate cut is therefore not on the horizon. 

Split Perspectives: RBI MPC's Take on Growth and Inflation

June 26, 2024 5:23 PM UTC

The latest minutes from the RBI MPC meeting indicated that members are optimistic about India's economic growth outlook but are exercising caution due to inflation concerns. The minutes underscored differing viewpoints between external and internal MPC members regarding future policy actions. While

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

Asia/Pacific (ex-China/Japan) Outlook: Growth Momentum but Delayed Rate Cuts

June 21, 2024 9:45 AM UTC

•    Economic activity in emerging Asian economies is forecast to remain strong. Despite several challenges, including a tight oil market, constrained liquidity conditions, and delayed rate cuts, the region's economic activity is expected to show resilience. Other potential obstacles include u

Mexico: Political Noise Amplifies Market Fears Amid Sheinbaum's Win

June 12, 2024 9:07 PM UTC

Claudia Sheinbaum's election win was expected, but MORENA's strong victory was surprising. This led to market concerns, significant peso depreciation, and fears of anti-market policies under Sheinbaum's possibly more radical government. Lopez-Obrador's proposed judicial reforms added to market worri

Mexico CPI Review: Some Pressure in Services

June 7, 2024 5:10 PM UTC

INEGI reported a 0.2% CPI decrease in May, with annual CPI stable at 4.7%. Electricity prices dropped, contributing to the decline. Core CPI rose 0.2%, while Non-Core fell 1.3%. Persistent Services CPI and food price shocks may sustain inflation. Peso volatility could also pressure inflation, likely

Mexico Elections: Sheimbaum Wins as Expected but the Surprise is in the Legislative

June 3, 2024 3:03 PM UTC

The Mexican election saw Sheinbaum from MORENA likely securing 57-60% of the votes, a significant lead over Xóchitl Gálvez. The MORENA coalition is projected to gain a two-thirds majority in the Chamber of Deputies but may fall short in the Senate. This result raises concerns over potential anti-m

Mexico Elections Update: Sheimbaum to Confirm Government Continuity

May 29, 2024 1:55 PM UTC

On June 2, Mexicans will vote for a new President, 500 deputies, and 128 senators. Claudia Sheinbaum from MORENA is favored to win, supported by incumbent President Lopez-Obrador's high approval rating. However, MORENA is unlikely to secure a two-thirds majority in Congress, limiting drastic policy

Indonesia CPI Preview: Food Prices to Maintain Pressure

May 28, 2024 10:11 AM UTC

Indonesia’s consumer price inflation is expected to remain broadly stable at the 3% y-o-y mark in May. Supply disruption due to floods in Sumatra region alongside persistent high food prices will keep price pressures elevated. 

Banxico Minutes: Unanimous Pause, Diverging Cuts

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