Parts of Latin America are seeing some of the sharpest rises in new coronavirus cases globally, meaning that lockdown measures – and the corresponding hit to activity – are likely to remain in place for longer than in many other EMs. This has prompted us to revise down our 2020 GDP forecasts for Brazil, Colombia and Peru. Elsewhere, the Ecuadorian government’s pursuit of further harsh austerity might be welcomed by bondholders, but could spark protests like those that occurred last year, which would put renewed pressure on bond spreads.
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