Brazil’s GDP to grow 3% in 2024, Mexico’s to slow down to 1.5% – IMF

LIMA (ICIS)–Brazil’s GDP is expected to grow by 3% in 2024, up sharply from prior forecasts of 2.1% growth published in July, the IMF said this week.

Mexico’s growth, however, is expected to slow down to 1.5%, down sharply from the previous 2.2% forecast.

For the Latin America and the Caribbean region as a whole, growth is projected at 2.1% in 2024, slightly up from the 1.9% forecast published in July, said the IMF.

“[Brazil’s GDP growth forecast] is an upward revision … owing to stronger private consumption and investment in the first half of the year from a tight labor market, government transfers and smaller-than-anticipated disruptions from floods,” said the IMF.

“However, with the still-restrictive monetary policy and the expected cooling of the labor market, growth is expected to moderate in 2025.”

The more conservative forecast for the Mexican economy reflects weakening domestic demand on the back of monetary policy tightening, said the IMF, who projected the country’s growth would continue slowing down in 2025.

The Fund expects Argentina’s GDP to fall by 3.5% this year, a forecast considerably more optimistic than most economists.

For detailed country-by-country figures see bottom table.

INFLATION BATTLE WON – MOSTLY
The IMF celebrated how for most countries in Latin America and the Caribbean inflation rates have dropped significantly from their peaks and continue to be on a downward trend.

The Washington-based body highlighted, however, how in some countries inflation is ticking up on the back of, among other factors, weather events, which can suddenly push prices for agricultural products.

“Large countries in the region have experienced upward revisions since the April 2024 World Economic Outlook that reflect a mix of 1) robust wage growth preventing faster disinflation in the services sector (Brazil, Mexico); 2) weather events (Colombia); and 3) hikes in regulated electricity tariffs (Chile),” said the IMF.

“[For example] Coffee prices rallied, rising by 33.8%, following weather-related supply concerns in key producers Brazil and Vietnam.”

Despite adverse weather events, Brazil’s national supply corporation Conab said earlier in October that the 2024-2025 fertilizers-intensive agricultural season is set to reach a record high.

Conab is forecasting grain production to reach 322.47 million tonnes in the 2024-2025 harvest, up 8.3% compared with the previous harvest.

IMF forecasts (in % change)	GDP growth 2023	GDP growth forecast 2024	GDP 2025 growth forecast	Inflation 2023	Inflation forecast 2024	Inflation forecast 2025
Brazil	2.9	3.0	2.2	4.6	4.3	3.6
Mexico	3.2	1.5	1.3	5.5	4.7	3.8
Argentina	-1.6	-3.5	5.0	133.5	229.8	62.7
Colombia	0.6	1.6	2.5	11.7	6.7	4.5
Chile	0.2	2.5	2.4	7.6	3.9	4.2
Peru	-0.6	3.0	2.6	6.3	2.5	1.9
Ecuador	2.4	0.3	1.2	2.2	1.9	2.2
Venezuela	4.0	3.0	3.0	337.5	59.6	71.7
Bolivia	3.1	1.6	2.2	2.6	4.3	4.2
Paraguay	4.7	3.8	3.8	4.6	3.8	4.0
Uruguay	0.4	3.2	3.0	5.9	4.9	5.4
Latin America and the Caribbean	2.2	2.1	2.5	14.8	16.8	8.5