Despite high-interest rates and inflation, economic conditions in Latin America may improve in the coming months, with Brazil and Mexico reporting higher GDP figures.
The news comes at a time when some countries, such as Uruguay, have had interest rate cuts after a modest decline in inflation.
The Mexican economy outperformed analysts’ forecasts, growing by little more than 1 % in the first three months of 2023. Brazil’s economy expanded by 3.3% in February, tripling the 1.1% increase expected by analysts polled by Bloomberg.
As a partner in the North American free trade agreement (USMCA), Mexico appears to be a beneficiary of continued demand for goods and services in the United States.
In Brazil, interest rates and inflation are high, but the new president, Lula Da Silva, is trying to make access to credit easier. Interest rates have risen to nearly 14% in Brazil. In Mexico, rates are at 11.25%.
Another reason that the Brazilian economy has not fallen into a recession is that there is a strong recovery in the agricultural sector.
Some analysts, however, are skeptical of the growth, citing declining commodity exports, which underpin most of the economies in the region, including Brazil.