Latin America | Latam: in a gradual convergence towards its macroeconomic equilibria

Summary

The Latin American region shows resilience to global uncertainty, with currency appreciation and lower risk premiums. Despite differences between countries, progress is being made towards macroeconomic stability with moderate growth and a gradual reduction in inflation and interest rates.

Key points

• Key points:
• The region's aggregate growth will go from 1.8% in 2024 to 2.2% in 2025, driven by the dynamism of Argentina and Colombia, while large economies such as Mexico and Brazil experience smaller-than-expected decelerations.
• For 2026, a new moderation in regional economic activity is expected, falling to around 1.8%, mainly due to the slowdown of the Argentine momentum and a greater deceleration in Brazil.
• Inflation remains high, although most countries are expected to reach their targets in 2026, with the exception of Peru, which is already below, and Colombia and Argentina, which face persistent pressures.
• Monetary policy reflects regional heterogeneity, where countries like Chile and Peru maintain low rates compared to the US, while Colombia and Brazil keep high rates due to the greater deterioration of their fiscal accounts.

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