While the three Andean economies also faced inflationary pressures, they were either much softer (in the cases of Colombia and Peru) or had been met with decisive action by the central bank (in the case of Chile), noted Deutsche Bank. Macroeconomic imbalances in Peru and Chile were poised to narrow down in 2022, pointed out the bank.
While Colombia's chronic twin deficit issue was worrisome, in Deutsche Bank's view, the Andean economies were currently facing the most complicated political challenges within Latin America.
The resolution of these ‘events’ (which include the conclusion of the Constitutional re-writing in Chile, Colombia's election, and questions about the likely longevity of President Castillo's government) will be key determinants of these countries' future growth prospects, according to the bank.
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