Slower growth to become the new norm

Economic growth across Latin America was weaker than expected in Q1. We estimate that regional GDP increased by about 2.2% y/y, down from 2.8% y/y in Q4 of last year – the slowest pace since 2009. There may be some recovery over the coming months as working day distortions related to the timing of Easter even out. Meanwhile, falling inflation should boost real incomes and give consumer spending a lift later this year. But the bigger picture is that the days of 5+% y/y growth that many had come to expect are probably over and that a slower pace of expansion of 2.5-3.0% y/y is now the new norm.