Economic Policy Evaluation

In addition to their regular forecasts for the major economic indicators (in February for Latin American Consensus Forecasts and in July for the Consensus Forecasts – G7 and Western Europe and Asia Pacific Consensus Forecasts countries), we survey our panelists for their qualitative evaluations of economic policy. The balance between current monetary and fiscal policy is assessed, as are panellists’ views regarding the likely and recommended direction of policy over the next twelve months.

Country Coverage

 

Our survey for Economic Policy Evaluation covers each of the countries listed above. The data below sets out the consensus responses for two of the Latin American economies, Argentina and Brazil, along with text commentary taken from our February 2025 survey below. To view a sample issue of Latin American Consensus Forecasts please click below.

With President Milei in Argentina holding only a small parliamentary majority ahead of congressional elections in October, he is may be likely to implement drastic changes as he seeks to strengthen his position. This may explain why 71% of respondents expect fiscal policy to remain unchanged, while 29% anticipate more stimulative measures. After marking progress in addressing soaring inflation and curtailing the previous government’s excessive money printing, consumer prices fell to double digits in January, prompting a 300bps cut in interest rates by the central bank. Consequently, most respondents feel that monetary policy is currently appropriate, and will remain unchanged albeit tight.

In Brazil, the central bank has diverged from regional monetary policy trends by hiking the SELIC rate, and hiking it twice by 100bps recently due rising inflation from increased public spending and tax exemptions. Therefore, it is not surprising that 100% of respondents feel fiscal policy is too stimulative and should be more restrictive. Additionally, while 78% of our respondents view monetary policy as currently appropriate, the majority believe it should become more restrictive due to mounting inflation pressures. Similarly, in Chile, recent rises in inflation (4.9% y-o-y in January vs 4.2% in November) have led the central bank to adopt a more hawkish stance at its recent policy meeting. While rates were left unchanged, the bank emphasized its commitment to bringing inflation back to its 3% target. As a result, most respondents believe that monetary policy is currently appropriate and should remain unchanged.

A portion of text from Latin American Consensus Forecasts, February 17, 2025.