Latin America News
LAST UPDATE: June 19, 2025
US-Canada deal prospect offers hope but inflation a worry if tariffs remain, says BoC
On June 18, BoC Governor Tiff Macklem stated that a U.S.–Canada trade deal expected within 30 days could remove steel, aluminum, and auto tariffs. However, he warned that if tariffs stay, consumer prices will rise and fuel inflation—potentially carrying over up to 75% of costs over 18 months .
Insight
Macklem highlights how unresolved trade barriers could undermine inflation control, forcing the BoC to consider tighter monetary policy despite growth concerns. A swift trade resolution would ease price pressures and support a more stable economic outlook.
Bank of Canada to Monitor Signs Of Broader Job‑Market Weakness, Macklem Says
On June 18, Governor Tiff Macklem said the Bank of Canada is monitoring a wide range of labour indicators beyond headline unemployment—such as part-time employment, manufacturing layoffs, and wage trends—to identify if job-market softness is spreading across sectors (marketscreener.com, bloomberg.com).
Insight
Macklem’s remarks signal a data-driven monetary policy approach, aiming to balance inflation control with sensitivity to early signs of economic slowdown. Should broader labour weaknesses emerge, the BoC may pivot toward rate cuts to cushion growth.
Canada Core CPI Measures May Be Overstating Price Rise, BOC’s Macklem Says
On June 18, Bank of Canada Governor Tiff Macklem expressed concern that the Bank’s preferred core inflation gauges—CPI-trim and CPI-median—are running above 3%, potentially overstating the actual rise in underlying consumer prices. He noted that other indicators suggest inflation may be closer to the 2% target (wsj.com).
Insight
Macklem’s comments signal caution in interpreting core inflation. If core CPI overstates price pressures, the BoC might delay further rate hikes or remain open to cuts once actual inflation aligns more closely with target. Accurate gauges are crucial for policy calibration.
Chilean economy to expand 2% to 2.75% this year, central bank says
Chile’s central bank raised its 2025 GDP growth forecast to 2.0–2.75% in June, citing stronger Q1 data. It expects inflation to average 4.3% in 2025 and dip to 3.7% by year-end. Interest rates are expected to gradually reach neutral levels .
Insight
The revision reflects resilience in domestic demand and investment, particularly mining. However, policy remains cautious, with elevated inflation and global uncertainties prompting a gradual approach to monetary normalization.
Argentina logs another fiscal surplus in May
In May 2025, Argentina posted a primary fiscal surplus of about 1.70 trillion pesos and a financial surplus of around 662 billion pesos, according to Economy Minister Luis Caputo’s post on X (marketscreener.com).
Insight
The continued fiscal surplus underscores the success of President Milei’s austerity measures—curbing spending and money printing to stabilize finances and maintain IMF confidence.
Sheinbaum proposes deal with Trump on trade, migration
On June 18, Mexican President Claudia Sheinbaum proposed a comprehensive deal with President Trump addressing trade, migration, and security, separate from USMCA negotiations .
Insight
This initiative reflects Sheinbaum’s strategic diplomacy—aiming to establish a formal bilateral framework early in Trump’s term to mitigate potential unilateral pressures.
