A view of the skyline during a sunset along Reforma Avenue in Mexico City, Mexico, on November 6, 2023. File photo credit Reuters/Jose Luis Gonzalez.
NEW YORK, New York--A forecast contraction in Mexico's 2025 economic output accounts for most of the International Monetary Fund (IMF)'s estimate for a slowdown in Latin America (LatAm) and the Caribbean's gross domestic product (GDP) growth this year, the fund's updated World Economic Outlook showed on Tuesday.
The International Monetary Fund now expects economic output growth in LatAm and the Caribbean to decelerate in 2025 to 2.0% from last year's 2.4% expansion, down from a January estimate for 2.5% growth.
"The revisions owe largely to a significant downgrade to growth in Mexico," the fund said, "reflecting weaker-than-expected activity in late 2024 and early 2025 as well as the impact of tariffs imposed by the United States, the associated uncertainty and geopolitical tensions, and a tightening of financing conditions."
Mexico's economy, strongly intertwined with that of the United States, is now forecast to contract 0.3% this year from a previous 1.4% expansion as US tariffs bite into exports.
Brazil, the region's largest economy, is seen slowing to 2.0% from a January view for 2.2% GDP expansion.
Argentina's 5.5% growth forecast for 2025 is an up-tick from the 5% expansion seen in January. Colombia is seen growing 2.4%, Chile 2.0% and Peru 2.8%.
For Central America the estimate is for 3.8% output growth this year, slightly slower than the 3.9% rate in 2024, while the Caribbean is seen decelerating to 4.2% in 2025 from last year's 12.1%.
The IMF cut its view of global economic growth in 2025 to 2.8% from 3.3% in January as the US lifted tariffs to the highest in a century. The fund cut its growth view on most single countries. ~ Reuters ~
