Economic Outlook for Latin America and the Caribbean

By Rodrigo Campos

NEW YORK (Reuters) – A forecast contraction in Mexico’s 2025 economic output accounts for most of the IMF’s estimate for a slowdown in Latin America and the Caribbean’s GDP growth this year, according to the fund’s updated World Economic Outlook released 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 of 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, down from a previous forecast of 1.4% expansion as U.S. tariffs impact exports.

Brazil, the region’s largest economy, is predicted to slow to 2.0% from a January estimate of 2.2% GDP expansion.

Argentina’s 5.5% growth forecast for 2025 is an uptick from the 5% expansion seen in January. Colombia is forecasted to grow 2.4%, Chile 2.0%, and Peru 2.8%.

For Central America, the estimate stands at 3.8% output growth this year, slightly slower than the 3.9% rate in 2024, while the Caribbean is projected to decelerate to 4.2% in 2025 from last year’s 12.1%.

The IMF has also reduced its global economic growth forecast for 2025 to 2.8% from 3.3% in January, as the U.S. has raised tariffs to the highest level in a century. The fund has cut its growth estimates for most individual countries.