Latam Views: Cruising Not Cracking

Latam economies are showing resilience to energy price shocks, though GDP growth has slowed to 0.3% and inflation forecasts are being revised upward. Central banks in Mexico and Brazil are adopting more cautious stances as services inflation remains sticky.

Key Takeaways

• 1.Latam real GDP growth (LA7) is slowing significantly, forecasted at just 0.3% qoq sa in 1Q26.
• 2.Macro revisions focus primarily on higher inflation rather than lower growth following the Middle East energy price shock.
• 3.Inflation is worsening due to high services momentum and rising fuel prices, described as 'work-in-reverse'.

Table of Contents

• Latam Real Activity: Up and Down
• Mexico Real Activity: The Third Time Will Not be the Charm
• Latam and the Oil Shock: So far Mostly an Inflation Rather Than Growth Story
• Latam Inflation: Upended by Services, Heated by Oil
• Mexico: Banxico — Done, for Now
• Brazil Copom: See no Evil, Do no Evil
• Colombia: The Show Must Go On
• Colombia Elections: Left, Right? Noisy Polls
• Peru Elections: The Fourth May be the Charm for K?
• Argentina: Low Growth, Stubborn Inflation, Low Satisfaction

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