Brazil’s recovery, two years of Amlo

The recent Q3 GDP data from Brazil confirmed that its economy has suffered much less than others in Latin America, largely due to the substantial fiscal support offered by the government. One consequence of the robust recovery is that price pressures are proving to be stronger than we’d previously anticipated, which is partly why we now expect 50bp of policy rate hikes next year. Elsewhere, Mexican President López Obrador (Amlo) celebrated two years in office this week. While his policymaking has been less erratic than initially feared, Amlo’s austere fiscal stance will keep a lid on Mexico’s economic recovery.