Bladex Weekly LatAm Insight

Economic Studies Department

_{Sergio Olarte | Gustavo Acero}

Our Weekly LatAm Insights, prepared by Bladex’s Economic Studies team, provide a weekly overview of the main macroeconomic developments in Latin America and the international environment, highlighting trends that may impact the region’s economic performance.

Key Takeaways of the Week

• The region combines fiscal, financial, and institutional progress. Fitch moved the Dominican Republic closer to investment-grade status, although fiscal and energy-sector risks persist. Honduras reached a staff-level agreement that could unlock US$120 million in IMF financing. Panama is moving forward with reconstruction efforts following the earthquake. Guatemala renewed the central bank’s top leadership and approved its legislative budget, while Costa Rica faces political tensions over the 2027 budget.
• Paraguay took center stage, while Brazil and Mexico pursued divergent monetary policy paths. In Paraguay, the resolution of Ueno Bank heightened political uncertainty and weighed on markets. Brazil paused its rate-cutting cycle amid renewed inflationary pressures, while Mexico lowered its policy rate to 6.25% despite ongoing price pressures. Colombia is moving forward with a budget expansion, while the central bank has tempered its growth outlook. Ecuador, meanwhile, submitted its 2027 draft budget, focused on social investment and deficit reduction.
• Democratic gains reshape the political landscape. The BoE raises rates. The Democratic victory in the midterm elections could constrain Trump’s agenda and increase pressure to pursue negotiations with Iran. Meanwhile, the U.S. economy continues to expand, supported by manufacturing and services activity. In the United Kingdom, the Bank of England raised its benchmark rate to 4% amid energy-related pressures and inflation of 3.5%, which is expected to remain elevated through mid-2027.

Read the full report here: Bladex Weekly LatAm Insight