Latest Economic Projections for Latin America: IMF vs. World Bank. IMF ProjectionsThe IMF now forecasts GDP growth in Latin America and the Caribbean will slow to 2.0% in 2025, down from 2.4% in 2024 and below its January forecast of 2.5%.The main reason for this downgrade is a projected contraction in Mexico’s economy, which
Latest Economic Projections for Latin America: IMF vs. World Bank
IMF Projections
The IMF now forecasts GDP growth in Latin America and the Caribbean will slow to 2.0% in 2025, down from 2.4% in 2024 and below its January forecast of 2.5%.
The main reason for this downgrade is a projected contraction in Mexico’s economy, which is now expected to shrink by 0.3% in 2025 (a sharp revision from a previous forecast of 1.4% growth), largely due to weaker-than-anticipated performance in late 2024 and early 2025, as well as the impact of increased U.S. tariffs and resulting uncertainty.
Brazil’s growth is expected to slow to 2.0% (down from 2.2%), while Argentina’s outlook has improved, with growth projected at 5.5% (up from 5.0%)
World Bank Projections
For Mexico, the World Bank now predicts 0% GDP growth (stagnation) in 2025, a 1.5 percentage point downgrade from its January forecast, citing “the highest levels of trade uncertainty in a decade” due to U.S. tariff changes and global market access concerns.
Argentina is forecast to rebound with 5.5% growth in 2025, similar to the IMF’s projection, after two years of recession.
Guyana is expected to lead the region with 10% growth.
The World Bank notes that business confidence has been high in Mexico and rebounded in Argentina, but overall, the region faces “a more challenging external scenario” with modest internal advances.
Key Reasons for Differences:
Assumptions About External Shocks: The IMF places heavier emphasis on the negative impact of U.S. tariff hikes and resulting trade uncertainty, particularly for Mexico, which is highly integrated with the U.S. economy. The World Bank also cites trade uncertainty but is slightly less pessimistic about the broader regional impact outside Mexico.
Country-Specific Factors: While both institutions agree on Argentina’s rebound and Mexico’s stagnation or contraction, their baseline assumptions about the severity and duration of these trends differ slightly, reflecting different modeling choices and weightings of recent policy changes or shocks.
Policy Response and Structural Factors: The World Bank places more emphasis on the effects of fiscal consolidation, monetary policy, and structural reforms, particularly in countries like Argentina and Brazil, while the IMF’s update is more reactive to recent trade and financial developments.
Forecasting Methods: Both institutions use different models and may weigh risks and recent high-frequency indicators differently, leading to variations in country-level and aggregate forecasts
Argentina: The country is mourning the death of Pope Francis, its most prominent religious figure, with seven days of official mourning and a special Mass at Buenos Aires’ cathedral, where he once served as archbishop. Known as the “pope of the poor,” Francis was celebrated for his advocacy for the marginalized and his efforts to unite people. President Javier Milei, despite past clashes, paid tribute, calling it an honor to have known him. Many Argentines expressed sorrow and lit candles in his memory.
