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Latin America Economic Forecast

Economic Snapshot for Latin America

bet360备用网址February 19, 2020

This year, regional growth is expected to bounce back from 2019’s weak showing as momentum in Brazil strengthens and activity in Mexico gradually recovers, with both economies supported by looser monetary conditions. Global trade uncertainty, exacerbated by the coronavirus outbreak; policy uncertainty domestically; and renewed social tensions cloud the outlook.

Latin America Monetary & Financial Sector News

Regional inflation came in at 7.9% at the outturn of 2020 (December: 7.9%). Flagging economic activity and declining energy prices have kept price pressures relatively contained across the region. Argentina and Venezuela are the notable exceptions, however. Inflation is projected to curb down this year and remain within monetary authorities’ target overall.

bet360备用网址The central banks of Brazil and Mexico slashed their policy rates in February—marking the fifth consecutive rate cut for both—as part of efforts to revive growth amid contained inflation. Meanwhile, policymakers in Chile, Colombia and Peru opted to stand pat, and Argentina’s monetary authority lowered the rate floor yet again. As a whole, looser monetary policy is expected ahead.

All currencies across the region lost ground against the U.S. dollar over the past month, with the Brazilian real in particular plunging to a record low. The stark exception was the Mexican peso, which appreciated on optimism over the signing of the USMCA trade deal and high domestic real interest rates. Currencies are expected to continue depreciating this year.

 

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