Real GDP Prints in Several Latin American Economies To Indicate Pace Of Rebound

• Fitch Solutions will be watching Q3 2021 GDP releases in Chile, Colombia and Peru this week for an indication of the state of the economic recovery throughout Latin America. 
• In particular, Chile and Peru have rebounded at a faster pace than other markets throughout the region due to a substantial fiscal stimulus, a series of pension withdrawal measures and robust demand for exports, resulting in 18.1% and 41.9% growth respectively, in Q2 2021. 
• While Colombia has grown at a somewhat slower pace, the lifting of public health restrictions has powered a swift recovery in the labour market and supported private consumption on the way to 17.6% growth in Q2. 
• While growth in all three economies will certainly decelerate in y-o-y terms through the end of 2021 and into 2022 as base effects fade, all three will likely have regained their pre-pandemic levels of output by mid-2022. Fitch expects this will allow their respective central banks to continue to raise their policy interest rates throughout 2022 in response to elevated inflation.

(Source: Fitch Solutions)