Latin America News
LAST UPDATE: June 7, 2025
IMF says Latin America must maintain fiscal plans amid uncertainty
The International Monetary Fund (IMF) has emphasized the need for Latin American countries to maintain prudent fiscal policies amid increasing global trade tensions and economic uncertainty.
Insight
The IMF’s call for fiscal discipline in Latin America highlights the region’s vulnerability to external shocks, particularly from U.S. market fluctuations. Despite recovering from the COVID-19 pandemic, many countries have reverted to high debt levels, making them susceptible to global economic volatility. The IMF’s recommendation to continue structural reforms and reduce trade barriers aims to enhance economic resilience. The launch of a regional training initiative in Paraguay reflects efforts to strengthen fiscal and macroeconomic expertise, crucial for navigating the current economic landscape.
Canada, China Agree to Normalize Ties After Years of Testy Relations
Chinese Premier Li Qiang expressed China’s willingness to enhance exchanges and dialogue with Canada to address mutual concerns, during a conversation with Canadian Prime Minister Mark Carney.
Insight
The agreement to normalize relations between Canada and China marks a significant shift after years of diplomatic tensions. Issues such as the arrest of Huawei’s CFO and China’s human rights record had strained ties. The willingness to engage in dialogue suggests a mutual recognition of the benefits of cooperation, especially in trade and economic sectors. This development could lead to increased bilateral trade, investment opportunities, and collaboration on global issues, signaling a potential thaw in previously frosty relations.
Canada’s May unemployment rate at multi-year high
In May 2025, Canada’s unemployment rate rose to 7%, marking the highest level in nearly nine years outside of the COVID-19 pandemic period, with 1.6 million people jobless.
Insight
The rise in Canada’s unemployment rate reflects underlying challenges in the labor market, despite modest job gains. The increase is attributed more to population growth outpacing job creation than to widespread layoffs. However, sectors like manufacturing have experienced job losses, partly due to U.S.-imposed tariffs affecting exports. The prolonged job search duration indicates potential structural issues in the labor market. Policymakers may need to consider targeted interventions to address sector-specific weaknesses and support affected workers.
Canada Introduces Bill to Speed Up Project Approval, Dismantle Trade Barriers
The Canadian government has introduced legislation aimed at expediting project approvals and dismantling internal trade barriers to stimulate economic growth.
Insight
The proposed bill represents a strategic effort by Canada to enhance economic competitiveness by streamlining regulatory processes and reducing interprovincial trade barriers. By facilitating quicker project approvals, the government aims to attract investment and promote infrastructure development. The dismantling of internal trade barriers could lead to a more integrated national market, boosting productivity and efficiency. This legislative move aligns with broader goals of economic diversification and resilience in the face of global trade uncertainties.
Brazil’s Lula bets on agriculture to drive higher growth in 2025
President Luiz Inácio Lula da Silva expressed optimism that Brazil’s agriculture sector could propel economic growth beyond current forecasts for 2025.
Insight
Lula’s confidence in the agricultural sector underscores its pivotal role in Brazil’s economy. The first-quarter GDP growth of 2.9%, driven by a robust soybean harvest, highlights agriculture’s potential to offset challenges from tight monetary conditions. As the world’s leading exporter of soy, coffee, cotton, sugar, beef, and chicken, Brazil’s emphasis on agriculture could not only bolster domestic growth but also enhance its position in global markets. However, this optimism contrasts with the Finance Ministry’s projection of a 2.4% growth, indicating a need for balanced expectations.
Chile’s inflation matches forecasts ahead of rate decision
In May 2025, Chile’s inflation rose by 0.2%, aligning with analysts’ expectations, with an annual rate of 4.4%, slightly above the central bank’s target range.
Insight
The inflation figures suggest a stable economic environment, providing the central bank with data to inform upcoming monetary policy decisions. The rise was primarily due to increases in food, non-alcoholic beverages, and household maintenance costs. While the annual rate exceeds the central bank’s 2%-4% target, the manageable monthly increase indicates controlled inflationary pressures. This stability could allow for cautious adjustments in interest rates to maintain economic balance.
Mexico’s Ebrard has ‘cordial’ meeting with US trade representative
Mexican Economy Minister Marcelo Ebrard held a ‘cordial’ meeting with the U.S. Trade Representative to discuss recent U.S. tariffs on steel and aluminum.
Insight
The meeting reflects ongoing efforts to address trade tensions between Mexico and the U.S., particularly concerning the recent increase in tariffs on metals. Ebrard’s diplomatic approach aims to protect Mexican industries while seeking a resolution that maintains strong bilateral trade relations. The outcome of these discussions could have significant implications for the North American trade landscape, especially under the USMCA framework.
