Understanding El Niño and its Impact on Latin America

This report examines the macroeconomic implications of the El Niño weather pattern in Latin America, focusing on its impact on inflation, fiscal accounts, and monetary policy. It provides a framework to assess country-specific vulnerability versus resilience.

Key Takeaways

• 1.El Niño creates a complex, variable impact across Latin America, affecting food prices, energy generation, and fiscal stability.
• 2.Colombia is identified as the most vulnerable Latin American economy due to high inflation, weak fiscal position, and significant El Niño exposure.

Table of Contents

• The basics
• Very uncertain impact
• A framework: Exposure vs resilience
• Investment implications
• Global asset class preferences definitions
• Appendix
• Risk information

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