LATAM | Why consensus may be underestimating 2021 growth

Even factoring in the relatively high probability (45%) of negative scenarios, our 2021 growth forecasts remain significantly above consensus. We think consensus bias to the downside is due to not capturing well enough the large statistical carryover left from 2020 and for overstating extreme risks. 

What you will learn:

  • Our baseline forecasts for 2021 growth are above consensus in five of the LatAm6 countries. But we hardly feel optimistic about the recovery, which makes us think the consensus numbers could be too negative.
  • Consensus forecasts also look too low when we compare them against our risk weighted projections. To be in line with consensus, we would need to double the odds of our most extreme scenario and slash the likelihood of an upside
  • The consensus for most countries is also below the carryover from 2020, implying that most analysts see LatAm GDP oddly moving backwards this year.

Topics: Economic forecasting, Macro, GDP, Latin America, Recovery, Growth

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