Revelation of Expectations in Latin America (REVELA) - Issue 73
Powell, Andrew; Sosa, Mariano
The May 2017 surveys of expectations conducted by Central Banks with inflation targeting regimes indicate that the simple average growth rate expected for 2017 for the eight countries covered by REVELA rose compared to the previous month by 0.1% from 2.3% to 2.4%. Also, the GDP-weighted average increased by 0.1% from 1.3% to 1.4%. On the other hand, inflation expectations fell by 0.1% from 4.6% to 4.5% according to the simple average of the surveys, and they remained stable at 4.5% under the GDP-weighted average in May. At the individual country level, growth expectations rose in three countries, remained stable in five and fell in none. They increased by 0.3% both in Uruguay from 2.3% to 2.6% and in Mexico from 1.7% to 2.0% compared to April. They also rose by 0.1% in Peru from 2.5% to 2.6%. Inflation expectations declined in four countries, rose only in one and remained constant in three. The most significant fall was observed in Uruguay by 0.6% from 7.8% to 7.2%, followed by 0.1% declines in: Brazil from 4.0% to 3.9%, Guatemala from 4.5% to 4.4% and Peru from 3.2% to 3.1%. Mexico is the only country where inflation expectations for 2017 increased, by 0.2% from 5.7% to 5.9%. With these results, growth expectations for the region for 2017 ranged from 0.5% in Brazil to 4.0% in Paraguay, while inflation expectations ranged from 2.9% in Chile to 7.2% in Uruguay.