Latin America Economic Forecast

Economic Snapshot for Latin America

November 7, 2019

After a weak 2019, regional growth is expected to regain steam next year. The acceleration will be driven chiefly by a pick-up in Brazil’s economy, thanks to monetary easing and reviving confidence. Growth is also seen accelerating in Chile, Mexico and Peru. However, Argentina is expected to remain in recession amid high inflation and policy uncertainty.

Latin America Monetary & Financial Sector News

Regional inflation dropped to 7.5% in September, down from August’s 7.9%. Modest economic activity has contained price pressures in most economies, with the stark exceptions of Argentina and Venezuela. Inflation is seen falling moderately ahead as price pressures in Argentina ease.

Brazil and Chile’s central banks continued their easing cycles in October, with low inflation giving space to act to spur activity. Meanwhile, Argentina’s Central Bank tightened capital controls, in order to stabilize the exchange rate after Alberto Fernández’s presidential victory. Uruguay’s Central Bank also tightened its stance amid elevated inflation and a sliding peso. 

Currencies had a mixed performance in recent weeks. Brazil’s real strengthened on a weaker dollar and some positive domestic news. Colombia and Mexico’s currencies also appreciated. However, Argentina’s peso continued to weaken, although at a less severe pace amid capital controls, and Chile’s peso hit a new record low. Currencies are seen weakening in 2020. 

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Latin America Economic News

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