The latest macroeconomic projections for Latin America from S&P Global Ratings do not indicate major changes from those projected in September. According to the organization, the growth of Gross Domestic Product After reaching 3.4% in 2022, this sector will slow to 0.7% next year as external demand slows, conditions Financial institutions weaken investment and reduce domestic demand.
“We anticipate that a cyclical shift to lower growth in the region, characterized by more subdued inflation, will usher in a cycle of interest rate cuts next year,” S&P Global Ratings said.
According to their projections, Colombia’s GDP will grow by 1.1% in 2023, while Chile will present the lowest growth in the region with 0.4%. Others such as Brazil and Argentina will each register a rate of 0.5%. Mexico would receive 0.8% and Peru, 2.5%.
The institution estimates that growth in 2024 will be a little over 2%. Furthermore, it warned that this situation could create uncertainty for investors, especially in economies that have recently changed governments, such as the case of Colombia and Brazil.
The agency predicts that as growth weakens in the world’s main economies in 2023, manufacturing output will have greater relevance for GDP growth, particularly in Latin America.
“One way to analyze the extent to which manufacturing output may constrain GDP growth in Latin America is to estimate the relationship of those sectors to GDP growth in the US for the various economies of the region, including those economies To put it simply, the US still plays an important role due to its supply chain linkages in manufacturing sectors and overall influence on global demand.”
See all projections here: https://www.spglobal.com/ratings/en/research/articles/221128- Economic-outlook-latin-america-q1-2023-a-shift-to-lower-growth-12571134