Latin America | Economic normalization amidst uncertain environment

Summary

Latin America is moving towards economic normalization after overcoming the initial volatility caused by the US elections. Although inflation is moderating and average growth will improve this year, the region faces an uncertain global context with weaker fiscal fundamentals.

Key points

• Key points:
• The region's average growth will reach 2.1% this year and 2.2% next year, surpassing the 1.8% registered in 2024 and approaching pre-pandemic averages.
• The moderation of interest rates is advancing at different speeds, being faster in countries like Peru and Chile, while in Colombia the process is moving more slowly.
• The external deficit remains at relatively small levels for most economies, highlighting the case of Peru, which manages to position itself in positive territory.
• Peru and Chile have announced the loss of their fiscal targets, while Brazil and Colombia register less favorable figures that raise the cost of public debt and affect the exchange rate.

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