Latam | The region stays ahead of the global cycle

The world's attention in recent months has been focused on the decisions of the U.S. Federal Reserve (Fed), geopolitics—especially the conflict in the Middle East—and activity in China. Little attention is paid to Latam, and there is scarcely talk of its economic policy or the dynamics of its activity.

Key points

• Key points:
• However, the region managed to weather one of the sharpest U.S. rate adjustments in decades, strong inflationary shock and a rapid decline in activity.
• Although it has not yet managed to normalize its growth, everything indicates that it will gradually do so, staying ahead of global cycles.
• Among the main countries in the region, there are already several that have reached inflation figures below the average of the last decade, such as Brazil, Chile and Peru. Although Mexico and Colombia have yet to overcome this challenge, they are already close and will surely do so in 2024.
• The success of this cycle, in part, was the early and decisive response of monetary policy in the region. Major economies raised their policy rates to levels not seen in decades, containing inflationary pressures and avoiding unwanted spirals that bring back memories of turbulent years in the region.
• Thus, we expect the region to achieve growth of 1.3% this year and 2.7% next year, exceeding the average of the last 10 years. However, despite this recovery, Latam continues to grow below the global average (3.1% in 2024 and 3.3% in 2025).

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