In our latest special report, we examined Latin America’s economic prospects over the coming decade, looking at GDP growth projections, key outlook risks, and the opportunities available to the region in areas such as energy and critical minerals. Below is a snapshot of the report’s key insights.
Region as a whole to stay stuck in low-growth equilibrium: Our Consensus is for the region to grow only slightly above 2.0% in the coming years, below the global average, weak by emerging market standards and insufficient for convergence with the per capita income seen in developed economies.
There will be only a few outperformers: Peru, Paraguay, Central America and Venezuela are the only places where our panelists forecast annual GDP growth to reach or top 3% over the next decade. This is partly because these areas are poorer than the regional average, leaving more space for catch-up growth.
Natural resources present a significant opportunity: Latin America is well endowed with critical minerals and rare earths, whose demand is rising faster than supply globally due to the AI boom and the green energy transition. Investment to extract them is set to grow in importance in coming years, though the region will need to improve logistics and refining capability if it is to maximise the economic potential.
Insight from our panelists:
Goldman Sachs’ Alberto Ramos talked about the challenges facing the region:
“Lately, it’s been hard to break the 2% barrier let alone the 3% one. The engine of growth seems to be damaged. There are numerous explanations, from low savings and investment rates to political and social instability, that ultimately lead to low productivity. There are also notorious frictions and inefficiencies in the credit markets and in the labor markets. And contrary to the common wisdom, those frictions tend to impact the larger companies the most. Many big companies are undersized compared to their potential.”
Our latest analysis:
China’s economy remained soft in August according to PMI survey data.
Australia’s GDP growth exceeded market expectations in Q2.