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Latin America’s 2018 Economic Outlook

latin-america-2018-economic-outlook

Latin America’s 2018 economic outlook looks much better than in the past year. As a whole, the region is projecting a 2.2% GDP growth. That’s a nice size increase from 2017’s 1.3% GDP growth. The increase is due in part to an overall global trend in which emerging markets are picking up steam again. An increase in Latin American exports along with price increases in commodities such as oil and minerals explain a large part of the improved economic scenarios.

Standouts

Four countries in particular: Chile, Brazil, Peru, and Colombia are expected to see the largest jumps from 2017. Chile is expected to grow its fastest pace since 2013. Brazil on the other hand should see its second year of gains after contractions in in 2015 and 2016.

11% Increase


From 2016 to 2017 in Latin American exports after four years of declines in a row.

12.5% Avg Increase


For commodity prices in 2017 (with energy jumping 19.5% and mineral prices jumping 19.9%.)

Politics

Politics are an important factor in the region’s economic outlook as several important elections take place this year:

  • Chile: Sebastian Pinera was elected in December 2Projected017, but takes office as President in March 2018.
  • Brazil: Will elect a new President in 2018.
  • Mexico: Will elect a new president in 2018 (Mexico and Brazil make up more than half of Latin America’s population).
  • Colombia: Will elect a new President (the first election since the FARC peace agreement).
  • Cuba: Raul Castro will step down.
  • Costa Rica: Will elect a new President.
  • Paraguay: Will elect a new President.
  • (Ecuador and Honduras: Elected new Presidents in 2017).

Projected Growth by Country

Panama, like in 2017, is expected to be the region’s fastest growing economy in 2018 (see our insights on the Panama Canal expansion). On the other side of the economic chart, Venezuela with all its political turmoil will be entering its fifth year of recession. Here’s a chart detailing the projected GDP growth in each of the countries in Latin America:

Projected 2018 GDP GrowthSource: Economic Commission for Latin America and the Caribbean (ECLAC)