LATAM Today: July 6, 2026

Research evidence excerpt

LATAM Today: July 6, 2026

Goldman Sachs LATAM Today

rising primary surpluses. This is consistent with the continuously rising public sector

debt.

6. The BRL/USD median expectation for year-end 2026 is at 5.20 (5.20 a week ago)

and for year-end 2027 at 5.28 (5.28 a week ago).

Softer Than Expected Industrial Activity in May With Weak Performance from Mining

Bottom Line: Industrial activity declined 0.2% mom sa (+0.2% yoy) in May, significantly below

consensus (+0.3% mom sa, +1.2% yoy) and interrupting a sequence of four consecutive

monthly increases averaging 1.1% mom sa. The composition of the May industrial activity

report was weak, with IP dragged by capital, intermediate, and consumer non-durable goods

(consumer durable grew 3.6% following a sizeable decline in April). Manufacturing rose just

0.1% mom sa (0.4% mom sa in Apr), and mining declined 2.6% mom sa. The carry-over for

2Q2026 is at 1.2% qoq sa, and for 2026 as a whole at 2.2%.

The industrial sector struggled in mid-2025 but seems to have turned the corner at the

beginning of 2026. Going forward, the industrial sector is expected to find support in

significant fiscal transfers to households, the expanding real wage bill of the economy,

and government-sponsored industrial policies, but to continue to face headwinds from

tight monetary and financial conditions.

DETAILS:

1. Industrial production surprised negatively with a -0.2% mom sa in May, below

the +0.3% mom sa Bloomberg consensus and ending a streak of four consecutive

positive prints (Jan/Feb/Mar/Apr 2.2%/1.1%/0.3%/0.7% mom sa) prints. Prior

prints were subject to very minor revisions, leaving the April IP level virtually

unchanged.

2. The composition of the May industrial activity report was soft, with IP dragged down