Back in the spotlight

Latin America has found itself back under the spotlight in recent weeks, this time as concerns over the economic outlook for China – the largest trading partner for most countries in the region – have resurfaced. As it happens, we think the very worst fears about China (and by extension Latin America) are overdone. And much of the recent gloom about Latin America has overshadowed early signs in the data that weaker currencies are starting to improve trade positions in the region. Even so, it is clear that the economic pain caused by the turn in global commodity “super cycle” and the necessary adjustment in domestic demand across Latin America is continuing to deepen. Economic growth and asset prices are likely to remain depressed for a while yet.