"I don't think limits." - Usain Bolt (Jamaican runner)
April 3, End Of Day
After years of turbulence, Latin America entered 2025 with a rare macroeconomic opportunity: growth has stabilized, inflation is down, and public debt is leveling off. But with global risks rising and productivity still weak, the question is whether this calm can be turned into something more lasting.
The Risks: Global Shocks Could Derail Modest Gains
The IDB models several global shock scenarios for 2025–2027. The worst-case “combined shocks” scenario could cut regional growth by more than half, down to just 1.1%.
The Opportunities: Build the House While the Sun Shines
Despite the risks, there’s room to grow, if policymakers act now.
Mexico: President Claudia Sheinbaum said Mexico will not retaliate with tariffs against the U.S., ahead of President Trump’s expected announcement of broad new trade duties. Instead, Sheinbaum pledged to unveil a comprehensive economic support plan. While calling for calm, she acknowledged potential risks, as Mexico’s economy, heavily reliant on U.S. trade, could tip into recession if tariffs persist.
Argentina: The poverty rate fell to 38% in the second half of 2024, down from 53% in the first half, offering a boost to President Javier Milei’s austerity-driven economic reforms. The drop follows a sharp devaluation, spending cuts, and removal of price controls aimed at curbing inflation, which has dropped from 289% to 66% annually. While the government credits economic freedom for the improvement, critics warn millions still struggle.
Panama: Denmark’s Maersk has acquired the Panama Canal Railway Company from Canadian Pacific Kansas City and the U.S.-based Lanco Group. The rail firm, which earned $77 million in revenue last year, provides freight and passenger services along the canal. Maersk said the deal strengthens its container logistics operations in the region. The sale comes amid rising geopolitical tensions, with the U.S. raising concerns over foreign, especially Chinese, influence near the canal.
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