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Latin America Economic Forecast

Latin America Economic Outlook

Latin America’s GDP growth will be below half its 2022 level this year on tight monetary policy and drought in some countries. However, forecasts have been revised up recently, and a tourism recovery, strong remittances from the U.S. and a bumper harvest in Brazil will provide support. Sociopolitical unrest and a further economic slowdown in China pose downside risks.

Latin America Inflation

Regional inflation declined to 15.5% in July from 15.7% in June, and most countries that have reported data saw price pressures dip in August. On aggregate, regional inflation is seen rising from current levels by year-end. However, this is mainly due to FX weakness in Argentina; most countries should see declining or broadly stable inflation from now through to end-2023.

This chart displays Economic Growth (GDP, ann. var. %) for Latin America from 2010 to 2022.

2018 2019 2020 2021 2022
Current Account Balance (% of GDP) -2.8 -2.1 -0.2 -1.9 -2.6
Merchandise Exports (USD bn) 1,045 1,036 947 1,211 1,408
Merchandise Imports (USD bn) 1,050 1,016 853 1,167 1,416
International Reserves (USD bn) 842 830 868 905 848
External Debt (% of GDP) 37.5 39.6 48.1 43.0 -
GDP per Capita (USD) 8,750 8,511 7,125 8,143 9,158
Economic Growth (GDP, ann. var. %) 1.7 0.8 -6.6 7.2 3.8
Private Consumption (ann. var. %) 2.2 1.3 -7.5 8.3 5.7
Fixed Investment (ann. var. %) 3.7 -0.5 -11.5 17.4 4.7
Industrial Production (ann. var. %) 0.7 -1.6 -6.9 7.7 1.9
Unemployment (% of active population, aop) 8.5 8.5 10.5 9.5 7.2
Fiscal Balance (% of GDP) -4.3 -3.7 -8.4 -4.1 -3.5
Public Debt (% of GDP) 59.1 59.2 69.0 63.2 61.5
Inflation (CPI, ann. var. %, aop) 6.7 7.9 6.4 10.0 15.6
Policy Rate (%, eop) 11.91 9.61 5.84 9.55 18.95
Exchange Rate (LCU per USD, eop) 325 330 354 408 445

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