Authors: Carlos Giraldo, Latin American Reserve Fund, Bogotá, Colombia. Email: – cgiraldo@flar.netIader…
Throughout the year, the global economy has experienced a slight deceleration in growth compared to 2023, accompanied by inflation rates aligning more closely with target levels. This trend has enabled central banks in the Eurozone and the United States to initiate reductions in interest rates.
In the past three months, Latin America has faced reduced external and domestic financing constraints, supported by lower interest rates driven by easing inflation in most countries. This context has enabled us to revise the region’s annual growth projection to 2.1% for 2024. However, inflation remains above target in several countries, and public debt continues to rise as a percentage of GDP, underscoring the need for greater fiscal consolidation efforts. These efforts, however, will need to be tailored to the diverse economic conditions across the region.
The extractive sector holds great relevance for the macro-financial stability of Latin America. In most economies in the region, significant commercial and financial inflows originate from the extractive industry, and a portion of government income relies on the well-being of these companies, sourced either from the taxes paid by these entities or from the profits generated when the state owns a share of their assets.
This blog post goes through our recent research, which explores how shifts in the US term spread influence these twin risks—default and depreciation—in five key Latin American markets: Brazil, Chile, Colombia, Peru, and Mexico.
To date, in 2024, the economy of Latin America has continued its macroeconomic adjustment process; the GDP growth is lower than that in 2023, which is accompanied by a decline in the current account deficit of the balance of payments and inflation.
In light of increasing climate uncertainty, it is crucial to understand its economic impacts. This blog post, based on our recent research, explores the asymmetric effects of climate-related shocks on economic growth in Latin America and the Caribbean.
The financial health of oil-producing entities is closely tied to oil prices. Historical data shows that the profits of leading international oil corporations have fluctuated in correlation with global oil price volatility.
Early warning systems represent a crucial asset for regulatory bodies and financial system overseers. While on-site monitoring stands out as a premier means through which authorities can glean both quantitative and qualitative insights into the fiscal well-being of the entities under scrutiny, the execution of such monitoring at a high frequency can incur substantial costs.