Latin America News
LAST UPDATE: June 13, 2025
IMF welcomes Argentina reform steps ahead of end-June visit
Ahead of a June IMF mission, the IMF praised Argentina for implementing Phase 3 of its stabilization plan, including floating the peso, boosting reserves via a $2 billion repo, and improving the central bank’s balance sheet.
Insight
The IMF’s endorsement signals conditional support for Milei’s reform agenda and serves to reassure markets of structural commitment ahead of the Executive Board review and next loan tranche.
Argentina inflation cools in May to lowest in over five years
Argentina’s monthly inflation dropped to 1.5% in May 2025—its lowest monthly rate since May 2020. Annual inflation slowed to 43.5% from 47.3%. Core inflation was 2.2%, and the cost of a basic food basket fell 0.4%, signaling potential relief. (elpais.com, reuters.com)
Insight
The sharp cooling reflects success of President Milei’s austerity policies (state spending cuts, reduced money printing) and validates the IMF-backed reform agenda; yet consumer pressure persists and inflation, though easing, remains high through year end.
Brazil renews push for fiscal package despite resistance from lawmakers
Finance Minister Haddad announced new tax proposals—including on online betting and investment income—and expects to raise R$40 billion (≈$7.2 billion) overall. Revenue will also come via dividends and oil auction proceeds, aiming to meet budget targets.
Insight
In response to earlier pushback on transaction taxes, the government pivoted to broader fiscal reforms, focusing on less ideologically sensitive areas. Its success will be pivotal for sustaining Brazil’s ~3% GDP growth.
Carney Sees Progress in Trade Talks Between US and Canada
Canadian Prime Minister Mark Carney (formerly BoC Governor) noted “intensive discussions” with the US on resolving tariffs—particularly steel and aluminum. He hopes to finalize a commercial-security agreement soon.
Insight
Talks signal a cautious thaw in US-Canada tensions, as both sides aim to resolve trade friction ahead of the G7 summit. A deeper agreement could stabilize bilateral relations and signal supply chain normalization.
Canada’s Household Wealth Rises in 1Q Amid Financial Volatility
Canadian household net worth increased 0.8% in Q1 2025 to CAD 17.60 trillion (~USD 12.87 T), adding CAD 141 billion, even as debt-to-income ratio rose to ~174%. Household spending rose faster than disposable income.
Insight
While aggregate wealth growth indicates resilience, rising debt levels and spending outpacing income raise concerns about household financial fragility, especially if interest rates rise or economic conditions deteriorate.
IMF report rolls in with general ‘positive outlook’ on consultation with Dominica
The IMF’s 2025 Article IV consultation praised Dominica’s modernization reforms and projected 3.5% GDP growth in 2024–27. It highlighted tourism, geothermal energy, and fiscal consolidation, while noting external and disaster-related risks.
Insight
The favorable outlook enhances investor confidence and may unlock further IMF support, but careful management is needed to reduce debt, strengthen resilience to disasters, and ensure sustained structural reforms.
Sheinbaum tells US official Mexico opposes immigration raids
Mexican President Claudia Sheinbaum, during talks with US Deputy Secretary Christopher Landau, firmly rejected US immigration raids targeting migrant workers. She emphasized that such actions damage both individuals and the US economy and called for their recognition as honest workers (elpais.com)
Insight
Sheinbaum is leveraging diplomatic channels to protect Mexican nationals abroad, framing migrants as vital contributions to both societies. Her stance also aims to defuse escalating tensions ahead of her expected meeting with President Trump at the upcoming G7 summit.
Ecuador Bonds Return 41% on Hopes of End to Political Turmoil
Ecuadorian bonds surged ~41% this quarter, reaching a three‑year high. Investors are optimistic following President Daniel Noboa’s actions—subsidy cuts, tax reforms—and IMF support, seen as stabilizing steps away from prolonged political instability
Insight
The market rally shows restored investor trust in Ecuador’s reform trajectory. Continued policy implementation and IMF-backed financing will be critical to sustaining debt affordability and avoiding political setbacks.
