1、04This time was different10Mastering the rhythm?18It takes two to tango17 April 2024Allianz ResearchLatin America:Shall we dance?Whats the outlook for Latin American economies?AllianzTrade2 This time was different:Latin Americas post-pandemic paso doble with inflation and the exchange rate.Reactive

2、monetary policies,supportive commodity prices and increased investor confidence have helped keep inflation and exchange rate volatility relatively in check.The region has become more resilient,thanks to lessons learned from previous crises,including reducing its reliance on foreign currency financin

3、g,improving financial regulation and supervision and maintaining the independence of central banks.For 2024,we expect a gradual economic recovery,with growth converging to around+2%,as central banks will proceed more cautiously and take a more gradual approach to further rate cuts,followed by+2.2%in

4、 2025.Brazils economic growth is set to slow down to+1.7%due to a less promising harvest and lower commodity prices,while in Mexico,recovering agricultural production and more modest growth in industrial production will temper economic growth to+2.0%.Nevertheless,most of Latin America will reap the

5、benefits of the commitment to stabilizing inflation,avoiding the usual hard landing.Insolvency risk remains proportionally higher in Latin America,according to our sector risk ratings which might undermine confidence in the regions businesses and penalize them among foreign suppliers,increasing work

6、ing capital requirements of Latin American companies.Allowing 30 extra days of payment on imports would free up around USD120bn in working capital,equivalent to the 2023 GDP of Ecuador,Latin Americas seventh largest economy,or 2%of the regions GDP.Mastering the rhythm.Latin America can be at the for