Principal Asset Management sees tight global financial conditions weighing on Latin America

By Public Technologies
  • Latin America’s October 2026 outlook faces tighter global financial conditions, with higher oil prices and a stronger dollar increasing inflation risks.
  • Brazil’s growth forecasts are slipping below 2%, while September inflation rose to 4.58%, reinforcing the need for restrictive monetary policy.
  • A further 25-basis-point Selic cut leaves room for additional easing, but a sustained cycle depends on fiscal credibility.
  • Mexico held its benchmark rate at 6.5%, with policymakers signaling potential cuts as September core inflation eased to 3.75%.
  • Chile’s August economic activity contracted 1% year over year, while external inflation risks leave limited room for near-term rate cuts.


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