Latin America Economic Forecast

Economic Snapshot for Latin America

July 13, 2021

Regional economy to recovery in 2021

The regional economy should recover some of last year’s losses in 2021, thanks to the gradual removal of restrictions and recovering global demand. However, the pace of recovery will be limited by the still-troubling pandemic situation. Additionally, social and political tensions, slow vaccine rollouts, sizable fiscal deficits and ailing labor markets cloud the outlook.

Inflation to rise 2021

Regional inflation inched up to 9.7% in June (May: 9.5%), marking a multi-year high, on mounting price pressures in heavyweight Brazil as well as in Chile, Colombia, Paraguay, Peru and Uruguay. This year, loose monetary policy stances, recovering activity and supply disruptions will fuel inflation, but large output gaps should limit it somewhat.


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