The latest hard activity data show that the pace of recovery eased across most of the region in August and more timely figures suggest that the trend continued in late Q3 and early Q4, indicating that the initial gains from re-opening economies are already beginning to fade. We think that the recovery further ahead will remain slow. New COVID-19 cases are still high in most countries, particularly in Argentina, suggesting that relatively strict containment measures will stay in place some time. And fiscal stimulus will unwind next year (most notably in Brazil) which will remove a prop to the recovery. As a result, we think that Latin America will continue to be a regional laggard in the global economy over the coming quarters.
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