GDP growth in Latin America probably reached a trough in Q1, but the pace of recovery will be slower than most expect. The prices of most of the region’s commodity exports will either fall or remain low. At the same time, global growth is set to stay weak, and most governments have little room to loosen the purse strings to offset external weakness. The good news is that subdued inflation will allow central banks to keep interest rates lower for longer than markets expect. And in Mexico, interest rates are likely to be cut.
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