Economic activity in Latin America and the Caribbean remains sluggish. Real GDP is expected to grow by 0.6 percent in 2019—the slowest rate since 2016—before rising to 2.3 percent in 2020.
The weak momentum reflects negative surprises in the first half of 2019, elevated domestic policy uncertainty in some large economies, heightened US-China trade tensions, and somewhat lower global growth.
The report says Sluggish activity in the first half of this year largely reflects temporary factors, including adverse weather conditions that reduced mining output in Chile and agricultural output in Paraguay. Mining activity in Brazil moderated following the Brumadinho Dam disaster, while growth in Mexico weakened due to an under execution of the budget, labor strikes, and fuel shortages.
Elevated policy uncertainty in some large economies of the region has also contributed to the weak growth momentum. In Brazil, concerns about the timing and scope of much-needed pension reforms—with a draft bill currently being discussed by Congress—has kept policy uncertainty above historical averages.
