Esperamos un crecimiento del PIB de de 4,0% para 2021
Esperamos un rebote del PIB de 3,0% este año, con riesgos a la baja.
Despite the downside activity surprise, we still expect GDP to drop 7% in 2020.
For 2021, we maintain our growth forecast of 3.0%, with downside risks
For 2021, we expect a broad-based growth of 4.0%.
Non-natural resources sector supported November’s activity expansion
A slow rollout of the vaccination program amplifies downside risks to activity.
Noticeable acceleration in annualized quarterly inflation, which hit 54% in 4Q20.
Higher soy prices unlikely to help an unbalanced economy
More populist initiatives from Congress
A swift vaccination rollout could compensate a weaker start to 2021.
Internal demand indicators remain far below pre-outbreak levels
Industrial production growth was driven by construction output
The strong CLP performance and the re-introduction of mobility restriction measures would contain pressures ahead
Un peso más fuerte y medidas de distanciamiento social más estrictas contendrían presiones inflacionarias hacia adelante
Non-core food prices exerted downward pressure, which was partly offset by a rebound in core inflation as the “Buen Fin” effect faded away.
Deputy Governor Heath and Esquivel were the dissenting votes.
Dynamic consumption and recovering oil prices would lead to a narrower trade surpluses ahead
El consumo dinámico y la recuperación de los precios del petróleo conducirían a un menor superávit comercial en el futuro
Renewed mobility restrictions and significant COP appreciation will keep inflationary pressures contained at the start of 2021.
The recovery at the margin is reflecting the economic reopening and economic stimuli.
Aunque el comercio se mantendría dinámico, las restricciones de movilidad harían que la senda de recuperación sea irregular.
La mejora en el margen refleja la reapertura de la economía y las medidas de estímulo
While commerce will remain dynamic, tighter mobility restrictions mean that the recovery path is set to be uneven.
Incipient signs of improvement in employment could be countered by social distancing measures and the minimum wage increase.
All sectors posted sequential gains in the quarter ended in October.
Monthly GDP continued recovering on a sequential basis.
The numbers confirm that the effect of Black Friday on November inflation was transitory
We see rates stable at 0.5% throughout 2021 and part of 2022
The minority is concerned with the possibility of a wider-than-estimated negative output gap.
We see downside risk to our primary deficit forecast of 6.9% of GDP this year
We see downside risk to our trade surplus forecast of USD 15.0 billion for this year.
A split board and the change in guard mean a deeper easing cycle cannot be ruled out
The economic reopening and signs of a recovering labor market are supporting improved import dynamics.
Domestic demand recovered at a slower pace than the external demand
We expect Banxico to resume cutting the policy rate as soon as 1Q21.
We recently raised our 2020 GDP growth forecast to -11% from -12%
The economy continued to recover in the beginning of 4Q20.
Lower-than-expected headline inflation does not brighten the cloudy horizon
Downside risks to our GDP growth forecasts.
With the economic reopening enduring at the backend of 2020, the continuance of the activity recovery is expected ahead.
El distanciamiento social afectaría la recuperación.
Revisamos al alza nuestra proyección de crecimiento del PIB de este año a -1,0% desde -1,5% anteriormente.
Solid macro fundamentals offset political turbulence.
Macro outlook remains challenging.
The government accessed the FCL amid a challenging fiscal situation, while a tax-reform is expected in 2021.
A fall in non-core fruits and vegetable prices also exerted downward pressure.
Investment dynamics would play a key role in the CB’s reaction function.
La inflación estuvo por debajo de lo esperado, sugiriendo que la presión del retiro de pensiones pasó
Inflation for 2020 will likely come in closer to 1.5%, rather than our current 2% call.
La debilidad de las importaciones perdura conforme la incertidumbre contiene a la inversión y se mantienen bajas las importaciones de energía
Imports remain weak as uncertainty restricts investments and the energy drag persists.
Inflation came below expectations, hinting that pressure form pension withdrawal faded.
Despite soft domestic demand, weak terms-of-trade mean Colombia’s trade deficit correction is slow.
A pesar de las señales de recuperación, el PIB se mantiene muy por debajo de los niveles pre-pandémicos.
We now expect end of year 2020 inflation at 2.0% (compared to our previous forecast of 1.6%).
Despite signs of a recovery, GDP remains well below pre-pandemic levels.
Self-employment leads job recoveries, but private salaried posts are also posting gains
Con la mejora de la producción industrial y el aumento de las ventas minoristas, esperamos que el Imacec registre se expanda por primera vez desde febrero.
With industrial production improving and retail sales surging, we expect the monthly GDP proxy to rise for the first time since February.
The unanimous decision is consistent a prolonged period of rate stability.
Lower unemployment was led by job gains at the margin
El menor desempleo estuvo liderado por ganancias de empleo en el margen
Manufacturing exports surpassed pre-outbreak levels
The recovery was driven mainly by the manufacturing output
Deputy Governor Jonathan Heath was the dissenting vote.
Still retail sales remain below pre-outbreak levels.
Doubts over how persistent is the recent fall in inflation.
The improvement in the current account balance was supported by the trade balance of goods.
We forecast a GDP contraction of 12% for this year, but the risks are tilted to the upside
Core goods non-food inflation slowed down amid Mexico’s black Friday
We recently revised our trade surplus forecast down to USD 15.0 billion
We forecast a primary deficit of 6.9% of GDP this year, up from 0.4% in 2019.
Final domestic demand recovery is supported by public and private demand
Monetary and fiscal stimuli and individual liquidity injections would consolidate the recovery ahead.
Los importantes estímulos monetarios y fiscales junto a las inyecciones de liquidez, consolidarían la recuperación hacia adelante.
Hacia adelante, la recuperación de la actividad llevará a déficits más amplios en la cuenta corriente
Going forward, the consolidation of an activity recovery would lead to gradually wider current account deficits
Despite the loosening of mobility restrictions over the course of the quarter, subnormal activity endured
Tax collection improved in 3Q20 in line with economic activity.
Non-natural and natural resource sectors recovered further in September
La recaudación mejoró en 3T20 en sintonía con la economía.
La actividad se recuperó secuencialmente en 3T20 pero el cierre de fronteras durante la temporada turística recortarán la recuperación.
The closure of borders during tourist season will hamper the recovery
The government has made a slight shift toward orthodox economic policies
The reopening of the economy, improving private sentiment and significant monetary stimulus would sustain the recovery process
We cannot rule out further cuts ahead if the activity recovery underwhelms and inflation expectations retreat
Milder import declines suggest a gradual domestic demand recovery is underway
Inflation was markedly above the Bloomberg consensus estimate of 3.1%.
We expect Banxico to resume the easing cycle next year.
Heightened political turmoil amid market-unfriendly measures
Industrial production recovery is driven by the manufacturing output
We now expect inflation at 3.9% for yearend 2020
La reapertura de la economía y el importante estimulo en curso moderaría el superávti comercial hacia adelante.
The economic reopening and significant stimuli in place should moderate the trade surpluses ahead
Muted inflationary pressures and a gradual activity recovery support a prolonged period of rates on-hold
Still, internal demand indicators remain far below pre-outbreak levels
Inflation will likely end the year close to the central bank’s 3% target
La inflación terminaría el año cerca de la meta del 3% del banco central.
The average policy rate would be marginally higher than the October median analyst expectations
GDP sits around 7% below the level prior to the pandemic, recovering from the cycle low of -16.2% in May
El PIB se encuentra en torno a un 7% por debajo del nivel previo a la pandemia, recuperándose del mínimo del ciclo de -16,2% en mayo
Flexibility on the unconventional measures will depend on possible financial market volatility ahead
While the labor market is recovering, numerous uncertainties point to a gradual improvement ahead
Lingering economic uncertainty would contain the pace of the recovery ahead
Activity recovery is driven mainly by the industrial sector
The MoF deteriorated slightly their fiscal balance estimates for 2020
With the economic reopening consolidating, as health indicators remain controlled, the activity recovery is expected to persist ahead
Developments on the global front highlight that significant uncertainty persists
La persistente incertidumbre económica contendría el ritmo de la recuperación hacia adelante
La consolidación de la reapertura de la economía, a medida que los indicadores sanitarios se mantienen controlados, permitiría que la recuperación avance.
La flexibilidad de las medidas no convencionales estará supeditada a la volatilidad del mercado financiero.
The improvement in the trade balance is mainly supported by manufacturing exports
Industrial output is recovering at a faster pace than services sector
The easing of distancing measures supported the recovery
We forecast a GDP contraction of 12% this year.
Persistence in inflation increases the odds of Banxico pausing its easing cycle
Our forecast for a surplus of USD 17.5 billion for this year has downside risks.
Our forecast for the primary fiscal deficit this year stands at 6.9% of GDP (from 0.4% in 2019).
Low terms-of-trade and still weak global activity mean Colombia’s external imbalances would persist.
Non-natural resource sectors supported the recovery in monthly GDP
The central bank would retain a significant monetary stimulus ahead, while adjustments to unconventional measures will be data dependent
El Banco Central mantendría un estímulo monetario significativo y usará medidas no convencionales con flexibilidad, dependiendo de los datos.
Disappointing activity at the start of 2H20 likely mean the GDP contraction this year would exceed our 6% call.
Core inflation slowed in September.
The annual inflation uptick is likely transitory amid a low base of comparison.
El repunte anual de la inflación sería transitorio, en medio de una base de comparación baja.
Core goods inflation remained persistent
Available room for maneuver will be data dependent
Improving consumer import dynamics is containing the surplus widening.
Mejora en la dinámica de las importaciones de consumo está conteniendo la ampliación del superávit comercial
Despite the widespread acceleration at the margin, inflation remained low in September.
Agricultural sector moderates fall in GDP
However, momentum remains weak
We maintain our inflation forecast for this year of 9.5%.
Nuestra proyección de inflación para 2020 se ubica en 9,5%
Sector agrícola modera caída del PIB
Political environment remains shaky
Servicios, construcción y manufactura fueron las principales incidencias a la baja, mientras que la mejora del comercio contuvo parcialmente la caída.
Narrower fiscal deficits for 2020 and 2021
The central bank has tigthtened exchange controls further
The FCL eligibility shows Colombia’s structural strengths, but the need to access it reflects a more challenging fiscal scenario.
However, inflation continues to be below BCRP inflation target
Services, construction, and manufacturing remained key drags, while commerce gains partly contained the decline.
The gradual reopening of the economy aided self-employment.
Improvement of hours worked signals that the worst has likely passed
Levantamiento de las restricciones de movilidad y pagos del retiro de los fondos de pensiones, consolidarían la recuperación impulsada por el comercio.
La mejora de las horas trabajadas apunta a que lo peor habría pasado
Further easing of mobility restrictions, along with added pension payouts would consolidate a retail-led recovery
we see upside risks to our forecast of a current account surplus of 0.6% of GDP for this year.
We expect the positive trend to consolidate with the easing of lockdowns in August and September
The manufacturing sector is driving the economic recovery
The recovery was driven mainly by the manufacturing sector
A split decision and capital flight concerns amid negative real interest rates suggest that the easing cycle likely ended.
Imports continued to contract as internal demand remained weak
Core goods inflation continues to be at a high level
Further monetary easing unlikely at least until the end of this year.
Still, retail sales are 12% below pre-outbreak levels
We forecast a GDP contraction of 12.7% this year
Our forecast for the primary fiscal deficit this year stands at 6.9% of GDP (from 0.4% in 2019),
Weak domestic demand in 2Q20 reflect the negative shock from COVID-19
Recovering, but still low terms-of-trade and dampened global activity mean Colombia’s external account imbalances would persist ahead
Despite the less pessimistic outlook, ample stimulus is set to remain in place
Headline inflation increased in August, in line with expectations and led by core items.
A pesar de perspectivas menos negativas, un amplio estímulo monetario se mantendría vigente
Natural and non-natural resources sectors are supporting the recovery.
We revised our forecast for the July monthly coincident indicator (ISE) to a decline of 9.2%, only a modest improvement from the 11.1% drop in June.
The manufacturing sector is the main driver of the recovery
The budget bill foresees a reduction of the consolidated fiscal deficit to 3.8% of GDP in 2021.
The budget bill aims to reduce the fiscal deficit to 4% of GDP in 2021, from an estimated 7% for this year.
Core goods inflation accelerated further
Optimistic oil production targets and GDP growth estimates risks missing fiscal targets
Para ello debe conseguir también la aprobación de un proyecto de convergencia fiscal para 2024.
A wide output gap and relatively stable currency ought to limit price increases going forward
Señales de que la dinámica de las importaciones está mejorando contendría la ampliación del superávit comercial hacia adelante
The economic reopening and oil price recovery will counter dampened domestic demand, preventing inflation falling significantly further
La reapertura de la economía y mayores precios del petróleo compensarán la debilidad de la demanda doméstica, limitando una marcada caída de la inflación.
Signs that import dynamics are improving would contain further surplus widening
El presupuesto prevé una reducción del déficit consolidado a 3,8% del PIB en 2021.
The central bank enters a wait-and-see mode, assessing the evolution of the economy while leaving the door open for further easing.
Argentina will seek an agreement with the IMF following a successful debt restructuring with private creditors.
Fiscal accounts deteriorate amid COVID-19 shock
La evolución del escenario económico estará determinada por el avance del Covid-19 y las medidas de contención.
The macroeconomic scenario evolvement continues to be determined by the development of Covid-19 and containment measures
Weak internal demand, recovering terms-of-trade, and a swifter global rebound will aid some further CAD narrowing
La compra de bonos de Tesorería podría ser usado para enfrentar problemas de liquidez, pero no para estimular la demanda agregada.
Headline inflation stood below the central bank target for twelfth consecutive month
Government bond purchases could be used to address liquidity issues, but not boost aggregate demand.
Improvements on the health front, along significant monetary and fiscal impulses, are contributing to the recovery.
As the mandatory quarantine was extended until the end of August, the labor market recovery is set to be gradual
The board is likely to evaluate how the economy progresses, while keeping the door ajar for further easing
With the economy reopening, cash transfers and pension withdrawals materializing, the activity recovery advancing.
Las reaperturas y la materialización de transferencias y retiro de pensiones ayudan a la recuperación de la actividad.
Historic job losses, record low participation and reduced work hours are consistent with only a gradual activity recovery scenario
While two members advocated for further easing, other two seem more cautious
Manufacturing exports recovered at a faster pace than non-oil imports
Inflation forecasts increased for 2020
Still monthly GDP is far below pre-outbreak levels
Trade surplus widened in July, on weak imports.
Net portfolio flows and FDI deteriorated amid uncertainty surrounding the outbreak