Latam | Latin America navigates troubled waters

Summary

Global uncertainty and US trade policies create a complex environment for Latin America. The region will face modest growth, high volatility, and a gradual reduction in inflation, forcing central banks to maintain caution in their monetary policy decisions.

Key points

• Key points:
• Regional growth will be just 1.9% in 2025 and 2026, falling below the historical average of 2.1% and the projected global growth of 3.3%.
• Argentina will stand out with the highest economic expansion in the region, reaching figures of 5.5% in 2025 and 4.0% in 2026 as a result of a recovery after years of poor performance.
• The Mexican economy will suffer a slight contraction of -0.4% in 2025 and a mild rebound of 1.2% in 2026, affected by US trade policies and a domestic fiscal adjustment.
• Colombia and Mexico maintain high real interest rates given the slow fall in inflation, while Brazil markedly increased its rate to contain recent inflationary pressures.

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