April 22, 2025
A forecasted contraction in Mexico’s 2025 economic output is the primary driver behind the IMF’s revised estimate for a slowdown in GDP growth for Latin America and the Caribbean this year, according to the fund’s updated World Economic Outlook released on Tuesday.
The International Monetary Fund now projects economic output growth in Latin America and the Caribbean to decelerate to 2.0% in 2025, down from last year’s 2.4% expansion and a January estimate of 2.5% growth.
“The revisions are largely due to a significant downgrade in Mexico’s growth,” the fund stated, “reflecting weaker-than-expected activity in late 2024 and early 2025, as well as the impact of U.S. tariffs, associated uncertainty and geopolitical tensions, and tighter financing conditions.”
Mexico’s economy, which is closely linked to that of the United States, is now forecast to contract by 0.3% this year, a sharp decline from the previous estimate of 1.4% growth, as U.S. tariffs impact exports.
Brazil, the region’s largest economy, is expected to slow to 2.0% growth, down from a January forecast of 2.2%. Argentina’s growth forecast for 2025 has been revised upward to 5.5% from 5% in January. Colombia is projected to grow by 2.4%, Chile by 2.0%, and Peru by 2.8%.
For Central America, the growth estimate is 3.8% this year, slightly down from 3.9% showcased in 2024, while the Caribbean is expected 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, citing the highest U.S. tariffs in a century. The fund has downgraded its growth outlook for most individual countries.
Source: (Reuters)
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