Latin American GDP growth slowed to its lowest rate since 2009 in the first quarter of this year and, while we expect to see a gradual recovery over the coming quarters, mounting vulnerabilities will prevent a strong economic rebound. Weaker growth in China will weigh on demand for the region’s commodities, while credit growth needs to cool in some countries. At the same time, the persistent strength of local currencies will continue to depress manufacturing in many economies. Policymakers generally have space to implement stimulus measures to support growth, meaning that interest rates will remain lower than the market currently anticipates. But even so, Latin American GDP growth is likely to be lacklustre at best for at least another 18 months. We’re forecasting an expansion of 2.8% in 2013 and 3.2% in 2014 – well below the average growth rates of 5.0% or so in 2010-11.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services