Global growth remains robust., although uncertainty is increasing

  • Global growth remains robust., although uncertainty is increasing. US fiscal stimulus may underpin progress in other areas too, but protectionist measures pose a risk.

  • Latin America maintains its recovery amidst external turbulence. Global growth will increase from 1.2% in 2017, to 1.4% in 2018 and 2.5% in 2019. We have revised our growth forecast for 2018 downward in Argentina, Paraguay and Uruguay due to the drought, and in Peru as a result of political noise. We have revised expectations for Chile upward due to higher copper prices and increased business confidence.

  • The cycle of interest rate cuts will come to an end in South America in the second quarter. The exception is Argentina, where they will fall again as inflation continues to slow. In Mexico, interest rates will remain stable to late 2018, when cuts will begin.

  • The main external risks center on protectionism (increased) and on China (lesser than three months ago). On the domestic front, political noise and the possible delay in public and private investment is an upside risk in a number of countries.

 

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