First quarter GDP data released over the past month suggest that the region’s economy slowed further at the start of this year, with growth dipping to just 2.0% y/y in Q1, down from 2.2% y/y in Q4. That was the second worst performance since the region emerged from recession in 2009 and the slowdown affected most of the region’s major economies. In Brazil, a slowdown in consumer spending combined with another sharp drop in investment pulled down growth. Meanwhile, there are signs that Argentina’s economy may have contracted for the second successive quarter – meaning that it would have entered a technical recession. However, it’s not all bad news. In Mexico, GDP growth accelerated despite the fact that the neighbouring US economy contracted. While we suspect that much of the region will continue to struggle over the coming year, Mexico is likely to remain a bright spot.
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