LatAm Outlook: Navigating the Uncertainty

26 March 2025 - 21:56

·       Brazil and Mexico economy are likely to decelerate in terms of growth in 2025, although we see this being stronger in Mexico. Mexico institutional reforms and its close ties with U.S. increases uncertainty for 2025, especially after Trump victory, and the menaces of Trump imposing tar

Argentina: Fresh IMF Deal on the Pipeline

12 March 2025 - 00:00

The Argentine government has issued an emergency decree to authorize a new IMF deal, potentially worth USD 20 billion, to pay off Treasury debt to the Central Bank. This deal includes a 4-year grace period and 10-year repayment terms. The government aims to stabilize reserves, delay debt amortizatio

Argentina: Recovery Complete?

27 February 2025 - 14:32

Argentina’s economy showed signs of recovery in December, growing 0.5% m/m and 1.2% q/q in Q4, with a 4.7% annual increase. The banking and trade sectors saw strong growth, but construction and industry stagnated. Despite progress, challenges remain, including inflation above 2%, a current account

Argentina: Primary Surpluses Continues

20 February 2025 - 18:18

Argentina’s fiscal anchor under Milei remains the key stabilizer, with inflation gradually declining and the crawling peg rate cut to 1% monthly. A primary surplus of USD 8 billion was achieved in 2024 through spending cuts, while capital controls and IMF support help manage low reserves. For 2025

Argentina CPI Review: January Relief but Inflation Fight Continues

14 February 2025 - 19:05

Argentina’s CPI rose 2.2% in January, slightly below forecasts, with Y/Y inflation dropping to 84% from 116%. Core CPI increased by 2.4%, accumulating 75% annual inflation. Inflation is expected to decline as devaluation effects fade, though inertia may keep it above 2% in the first half. Services

Argentina: Lower Rates, Conditions to Lift the Controls

06 February 2025 - 18:16

The Argentine Central Bank cut rates to 29%, citing improved inflation expectations. Rather than using a contractionary policy, it aims to curb monetary base growth through fiscal consolidation. Inflation is below 3%, with a 2% target feasible by mid-year. However, the 1% crawling peg risks eroding

Argentina: Adjusting the Anchor

22 January 2025 - 14:40

Argentina is refining its monetary framework as inflation stabilizes below 3.0% (m/m), marking progress after double-digit levels. Key measures include halting Peso issuance, fiscal adjustments, sterilization to stabilize the monetary base, and diminishing the pace of depreciation of the official ex

LatAm Outlook: Economic Shifts

18 December 2024 - 17:21

·       Brazil and Mexico economy are likely to decelerate in terms of growth in 2025, although we see this being stronger in Mexico. Mexico legal reforms and its close ties with U.S. increases uncertainty for 2025, especially after Trump elections, although we see tariffs in 2025 as unlikely

Argentina CPI Review: Monthly Inflation Drops to 2.7%

13 November 2024 - 15:09

Argentina's October CPI rose by 2.7%, hitting a three-year low and reducing the Y/Y inflation to 192%. Milei’s fiscal shock plan aims to curb inflation, with anticipated tariff adjustments potentially keeping inflation near 3% monthly in the next month. With inflation dropping Argentine government

Argentina: Milei’s Plan Going Smoothly

22 October 2024 - 17:51

Since taking office, Milei's administration has focused on tackling Argentina's fiscal and monetary imbalances, implementing a shock fiscal plan to reduce expenditures by 4% in 2024. Fiscal surpluses have been recorded monthly, but the adjustment has caused three consecutive quarters of economic con

LatAm Outlook: Diverging Patterns

24 September 2024 - 12:54

·       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

19 September 2024 - 13:38

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

Argentina CPI Review: 4.2% only in August

12 September 2024 - 14:18

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

22 August 2024 - 14:08

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

15 August 2024 - 14:52

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

13 August 2024 - 12:57

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

26 July 2024 - 14:51

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

19 July 2024 - 13:10

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

15 July 2024 - 13:24

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

Argentina GDP: Economy Shrinks 2.6% in the First Quarter

25 June 2024 - 14:16

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

24 June 2024 - 18:00

·       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

22 May 2024 - 14:44

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

15 May 2024 - 12:18

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

26 April 2024 - 17:52

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

Argentina CPI Review: Small Improvements Amid the Uncertainty

14 April 2024 - 13:26

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

LatAm Outlook: Getting Deeper in the Cutting Cycle

22 March 2024 - 19:04

·       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

13 March 2024 - 20:09

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

15 February 2024 - 13:26

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

07 February 2024 - 12:53

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

24 January 2024 - 21:38

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

Argentina: December CPI Data and IMF

24 January 2024 - 14:47

Argentina's CPI surged in December due to a sharp exchange rate devaluation. The new government's bold fiscal measures aim to curb inflation, but potential contractionary effects and public reactions pose challenges. A $4 billion IMF disbursement supports their plan, diverging from past gradualism.

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

21 December 2023 - 13:58

Javier Milei's rapid push for Argentine economic deregulation faces its initial test in Congress. Proposing over 30 amendments, including repealing significant laws, Milei aims for a swift transition to a pro-market economy. With the Emergency decree requiring support from the fragmented Juntos por

LatAm Outlook: Diverging Paths in 2024

15 December 2023 - 12:25

·     We foresee Brazilian GDP growth decelerating in 2024, while we see Mexico continuing strong growth as a consequence of higher demand from U.S. and nearshoring. Argentina will see some growth in 2024 due to a lower basis of comparison and a better harvest in the agricultural sector.
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Argentina: Tentative Shock Plan Announced

14 December 2023 - 15:50

Argentina's Economic Minister, Luis Caputo, reveals pivotal economic reforms to tackle the nation's fiscal deficit. Key measures include currency devaluation, subsidy cuts, and ministry reduction. While aiming for a zero deficit, skepticism lingers, especially with unaddressed pension issues. The pl

LatAm: Long Term Growth Differences

24 November 2023 - 11:52

In Latin America, distinctive long-term growth patterns are emerging. Brazil faces challenges of an aging population and constrained capital growth, aiming to return to pre-pandemic growth at 1.7%. Mexico anticipates growth through nearshoring, intensifying existing industries for a 2% long-term pro

El niño impacts on Latin America: a headwind for Brazil

22 November 2023 - 11:30

El Niño, a climate pattern intensifying Pacific Ocean warmth, triggers varied impacts across Latin American economies. Severe droughts affect agriculture in some regions, while excessive rains benefit others but pose risks of flooding. Initiated in 2023, El Niño persists until 2024. In 2016-17, Br

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

14 November 2023 - 17:17

Argentina's CPI rose 8.3% in October, a slowdown from the prior 12.1%. Yet, the Yr/Yr CPI surged to 142.7%, the highest since 1991, with Core CPI at 150%. Communication, Household Goods, and Clothing led expenditure increases, surpassing 10% on the month, while Health (6.1%) and Education Services (

LatAm Outlook: Growth Continues

28 September 2023 - 20:46

Argentina: Post Primaries Devaluation

22 August 2023 - 13:32

In the wake of Javier Milei's unexpected far-right victory in the Argentine Primaries, the government has introduced a sweeping package of measures, including a 21% devaluation aligned with IMF terms for a USD 7.5 billion disbursement. While aimed at countering inflation and boosting exports, doubts

Argentina Primaries: An Open Three Horses Race

14 August 2023 - 20:12

Argentina recently held its national primary elections for the presidential race, yielding surprising results. Notably, the far-right candidate, Javier Milei, secured a significant victory by capturing 30% of the total votes. The center-right opposition coalition attained 28% of the votes, designati

Argentina: New Staff Level Agreement with IMF Reached

31 July 2023 - 14:27

Due to the severe droughts faced in rural areas, the IMF has revised its current deal with Argentina, lowering the reserve accumulation targets for end 2023 and allowing Argentina to access USD 7.5 billion in the upcoming months. Due to the low level of FX reserves we believe severe import restricti

Argentina: Elections Shapes up

18 July 2023 - 16:53

Argentina’s upcoming primary election will feature two candidates from the ruling coalition “Unión por la Patria” and two candidates from the opposition coalition “Juntos por el Cambio”, while Javier Milei will be the sole candidate for “La Libertad Avanza”. We expect the ruling coali

LatAm Outlook: Lower Inflation and Growth above Expectations

21 June 2023 - 09:27

Argentina: Small Recover Delays the Recession Threat for Now

26 May 2023 - 14:14

Recent activity data for Argentina suggests that the economy has exhibited a partial recovery following the 1.5% decline experienced in the previous quarter of 2022, indicating positive growth during Q1. However, it is important to acknowledge the potential challenges that lie ahead for Argentina's

Argentina: Inflation Uproar

16 May 2023 - 14:35

Argentine inflation in April exceeded expectations, with the Consumer Price Index (CPI) rising to 108% and core inflation surging to 105% (y/y). Finance Minister Sergio Massa, held a lengthy meeting to discuss measures to address the inflation problem and we believe the proposed solution will have a

Argentina: Economic Chaos Continues

05 May 2023 - 13:05

Argentine reserves have dropped to a 6 years low and is set to continue to face difficulties in the coming months due to the impact of the droughts. We believe the government will have no answer, but to increase the import restriction which is likely to put Argentina in a recession in 2023. As econo

27 April 2023 - 13:06

The biggest LatAm economies have been showing different path in terms of their trade balance, especially their exports. We take a look at the main trends for the three biggest LatAm countries: Mexico, Argentina and Brazil.

Argentine Elections: Incumbent President Fernandes Withdraws from the Race

25 April 2023 - 12:34

In a suddenly move, incumbent President Alberto Fernandes has withdrawn from the electoral race. However, neither the candidates of the ruling coalition “Frente de Todos” and opposition “Juntos por el Cambio” are decided. We take a look at some names, which could appear on the primary electi

Argentina: CPI Continues its Upward Trend

17 April 2023 - 16:56

Argentina CPI’s has increased 7.9% (m/m) during March, reaching 104.2% (y/y). Food Inflation has reached 109% (y/y). The high number of inflation is affecting the feasibility of the Fair Prices measures, which restricted the rise of several products up to 4% per month. We believe inflation will ke