LATIN AMERICA - Reports

Brazil’s economy slowed sharply in Q2, expanding only 0.3% compared to 1.4% in Q1. Weaker industrial activity, lower agricultural output, and high interest rates weighed on growth. Despite the deceleration, year-over-year GDP remains positive at around 2.2%, reflecting resilience but also highlighting challenges to sustaining momentum ahead. 

Startup investment in Latin America surged 26% in 2024, driven by fintech, e-commerce, and healthtech sectors. Mexico and Argentina led the wave, with Argentina’s Ualá raising $330 million. Analysts expect the momentum to continue in 2025, fueled by global investor interest and regional demand for digital transformation. 

Colombia has applied to join China’s New Development Bank, committing $512 million in capital. The decision underscores Bogotá’s pivot toward alternative financing sources beyond Western institutions. Membership is expected to unlock funding for infrastructure and development projects, deepening Latin America’s economic integration with China’s expanding global financial architecture. 

The IMF lowered Latin America and the Caribbean’s 2025 GDP growth forecast to 2.0%, citing global trade tensions and weaker domestic demand. Mexico faces a projected 0.3% contraction, while Brazil, Chile, and Colombia show modest growth. The revision highlights structural vulnerabilities and uneven resilience across regional economies. 

Mexico’s President Claudia Sheinbaum marked her first year in office highlighting economic progress. She credited policies that lifted over eight million people out of poverty, maintained a strong peso, and attracted investment. While praising social gains, she avoided deeper discussion of persistent challenges, including cartel violence and structural inequality. 

Brazil is evaluating retaliatory tariffs against the U.S. after Washington’s latest trade measures. President Lula authorized a formal review to identify potential sectors for countermeasures under reciprocity laws. The move underscores rising tensions, with agriculture and manufacturing seen as likely flashpoints in escalating bilateral trade frictions between the two nations.