We expect the economic downturn in Latin America to bottom out towards the turn of this year and conditions to improve in 2016. However, the recovery will be slow-going and uneven. For a start, the lagged effects of currency weakness will keep inflation elevated and force central banks in most countries to tighten monetary policy. More fundamentally, while the big falls in global commodity prices are probably behind us, without a renewed surge in prices, income growth will remain subdued. Of the major economies, we remain most concerned about Brazil, where the drop in commodity income has revealed severe strains in balance sheets. But growth everywhere will remain weaker than most expect. Even in Mexico, where we remain relatively upbeat, we have nudged down our forecasts for next year. All told, we expect the region to grow by just 1.0% in 2016 and 2.5% in 2017.
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