Five themes that will shape Latin America’s outlook in 2022
We expect Latin America to return to low trend growth in 2022, as policy support is withdrawn and the easy gains from the reopening fade. LatAm’s recovery will continue to lag the rest of the world and remain uneven across countries. A disorderly withdrawal of fiscal support, however, could tip economies back into recession or lead to social unrest. To ensure borrowing costs do not rise further and that fiscal credibility does not come under questioning, countries will need to start running primary budget surpluses.
What you will learn:
- LatAm will continue to underperform the rest of the world as we exit the Covid-19 pandemic
- By H1 2022, we expect the reopening of high-contact sectors to be completed while nearly every country in the region will be facing shrinking policy impulses
- Once the withdrawal in 2022 of policy support begins to hit
consumer spending, there will be a temptation to turn temporary pandemic relief measures like cash transfers into permanent ones
Tags:
Related Services
Post
Why the next era of inflation may be benign globally
A return to the sustained 'lowflation' of the 2010s is unlikely, in our view. But we also doubt that the economic landscape has changed significantly enough that inflation will 'unanchor' from target at a higher level. Over the longer-term, we expect inflation to average around 2%, though this will include longer periods above target than was the norm post-financial crisis.
Find Out MorePost
How GenAI will change the world economy
Generative AI has the potential to substantially improve the medium-term growth outlook for the economy. It arrives at a perfect moment – labour is going to be less supportive of growth as aging dynamics hit home and productivity is flagging.
Find Out More