Key facts
- Chile's Finance Ministry seeks an additional $6.2 billion in borrowing authority.
- Chile's debt-to-GDP ratio is projected to exceed 45.0% in 2028.
- Chile's economic activity fell 1.2% year-on-year in April.
- Chile's mining activity decreased by 11.8% in April.
- Angola plans to buy back USD bonds maturing in 2028 and 2029.
- Angola will issue new bonds due in 2031 and 2037.
- The Bank of Korea maintained its benchmark interest rate at 2.5%.
- Two Monetary Policy Board members favored a 0.25% rate increase.
- The Bank of Korea projects 2.6% GDP growth and 2.7% inflation for 2026.
- Brazil increased its budget freeze by BRL 23.7 billion.
- Brazil forecasts a BRL 4.1 billion primary surplus in 2026.
- Mexico's public sector primary surplus reached MXN 77.1 billion in April.
Chile's Finance Ministry is requesting an additional $6.2 billion in borrowing authority to address a higher deficit and account for exchange rate effects. This move accompanies revised fiscal deficit and debt forecasts for 2026-2030, with projections indicating the debt-to-GDP ratio could surpass 45.0% in 2028. In parallel, Chile's economic activity experienced a 1.2% year-on-year decrease in April, extending a trend of contraction for the fourth consecutive month. This decline was largely driven by an 11.8% drop in mining activity, although the non-mining sector managed a slight 0.4% growth. Analysts anticipate that these figures may lead to downward revisions in overall growth forecasts.
Angola's Ministry of Finance is initiating a liability management transaction aimed at extending the maturity profile of its national debt. The strategy involves repurchasing U.S. dollar-denominated bonds that are due to mature in 2028 and 2029, and simultaneously issuing new bonds with maturities set for 2031 and 2037. Brazil's government has increased its budget freeze by BRL 23.7 billion, a measure necessitated by escalating mandatory expenditures, particularly in welfare and social security programs. Despite this fiscal pressure, the government maintains a forecast of a BRL 4.1 billion primary surplus for 2026, supported by anticipated higher revenues stemming from elevated energy prices. Mexico reported an increase in its public sector primary surplus, reaching MXN 77.1 billion in April, attributed to a reduction in public spending. The country's general deficit also saw a narrowing to MXN 37.1 billion.
In Asia, the Bank of Korea has decided to maintain its benchmark interest rate at 2.5%. However, the central bank has adopted a more hawkish forward guidance, indicating a possibility of future rate increases. Notably, two out of the five members of the Monetary Policy Board advocated for an immediate 0.25% rate hike. The BOK's economic outlook for 2026 includes projections of 2.6% GDP growth and 2.7% inflation. Meanwhile, Israel's Finance Ministry has issued updated fiscal projections spanning three years. The outlook for the deficit has improved, benefiting from upward revisions in revenue forecasts and modest spending cuts. Nevertheless, the ministry anticipates an increased share for defense and interest payments within the overall fiscal expenditure.
Analysts anticipate downward revisions to Chile's growth forecasts. The Bank of Korea adjusted its forward guidance to a more hawkish stance. The government forecasts a BRL 4.1 billion primary surplus in 2026 for Brazil. Israel's Finance Ministry anticipates increased defense and interest spending's share of the budget.