Latin America News
LAST UPDATE: September 23, 2025
IMF forecasts Mexico economy growing 1% in 2025
The IMF projects Mexico’s economy will grow by around 1.0% in 2025, before improving slightly to 1.5% in 2026, reflecting weaker near-term momentum.
Insight
The forecast underlines Mexico’s economic headwinds and the need for policy adjustments to strengthen long-term growth while managing fiscal constraints.
Argentina central bank leans on dollar reserves to curb peso weakness
Argentina’s central bank sold its largest amount of dollars in nearly six years—about $678 million in one day—to support the peso as it weakened amid political uncertainty. Over three sessions the total reached $1.1 billion.
Insight
The government is willing to burn through reserves to defend its currency, but the pace of intervention risks depleting the stock quickly—raising questions about long-term stability if confidence continues to erode.
Milei Defends Peso to ‘Last Dollar’ as Devaluation Jitters Mount
President Javier Milei vowed to defend the peso “to the last dollar” as pressures for devaluation rise; the central bank has lifted some controls, letting the peso float within a band.
Insight
The rhetoric suggests a strong resolve but also a recognition of deep market anxiety—if this defense falters, there could be a sharp devaluation, which would further destabilize confidence.
Canada Retail Sales Look to Recover after Falling 0.8% in July
Canada saw a 0.8% drop in retail sales in July, with most parts of the sector down—especially clothing and groceries. Early estimates suggest a possible 1.0% rebound in August.
Insight
The dip adds stress to economic growth in Q3, but the forecasted rebound, if realized, could help avoid a contraction—stimulus or consumer confidence will matter.
Peru central bank raises 2025 growth forecast
Peru’s central bank bumped up its 2025 GDP growth forecast to 3.2% from 3.1%, citing stronger non-primary sector activity and resilient private spending. Inflation is projected to be 1.7% by end-2025 and 2.0% by end-2026.
Insight
The upward revision signals confidence in Peru’s economic momentum outside of its traditional commodity sectors, and suggests inflation risks are under control, which might give room for stable monetary policy.
Venezuela accuses US of waging ‘undeclared war’
Venezuela has accused the U.S. of conducting an “undeclared war” in the Caribbean, citing recent U.S. strikes on alleged drug smugglers and deployments of warships and aircraft. Caracas is calling for a UN investigation.
Insight
Tensions are surging in U.S.–Venezuelan relations; this could escalate diplomatic conflict and complicate anti-drug cooperation, potentially provoking regional security concerns.
US offers financial lifeline to Argentina’s Javier Milei
U.S. Treasury Secretary Scott Bessent has stated that the Trump administration is considering all options to support Argentina, which he called a “systemically important US all in Latin America.” This could include swap lines, direct currency purchases, and purchases of US dollar-denominated government debt to help President Javier Milei’s government manage extreme market volatility.
Insight
This pledge of support from the U.S. demonstrates a strong political and economic alignment between the two nations and provides a critical “circuit breaker” for Argentina’s struggling economy. The explicit mention of specific financial tools, such as swap lines and direct currency purchases, highlights the seriousness of the US commitment to stabilizing the Argentine market and shoring up the Milei administration.
Argentina markets soar after US Treasury pledges support
Argentine financial assets, including US-traded stocks, international dollar bonds, and the peso, rallied significantly after the US Treasury pledged financial support for the government. Treasury Secretary Scott Bessent said “all options are on the table” to support Argentina, including swap lines and debt purchases, and that any action would be “large and forceful.”
Insight
The immediate and strong positive reaction in Argentine markets demonstrates the immense influence of U.S. financial backing and investor confidence in Argentina. This US pledge of support provides the Milei administration with a crucial window of opportunity to reorient its economic strategy ahead of the upcoming midterm elections.
Canada Producer Prices Continue to Rise, Advancing 0.5% in August
Canada’s industrial product price index increased by 0.5% in August, driven by higher prices for meat, non-ferrous metals, and vehicles, despite a decline in energy costs. The index rose 4.0% on a year-over-year basis, marking the eleventh consecutive increase. At the same time, raw material prices paid by manufacturers dropped slightly.
Insight
The continued rise in producer prices, even with falling energy costs, suggests that inflationary pressures are persistent in Canada’s manufacturing sector. This could signal future increases in consumer prices as companies pass on higher costs, and it may impact the Bank of Canada’s monetary policy decisions.
Canada Drops Two Lumber-Trade Complaints Against U.S.
Canada has withdrawn two legal complaints against the US regarding duties on softwood lumber. The move is part of an effort by Prime Minister Mark Carney to reach a negotiated truce with the Trump administration on the long-standing trade dispute. A foreign department spokeswoman stated the decision was a “strategic choice to maximize long-term interests.”
Insight
The withdrawal of the complaints is a significant concession from Canada in its ongoing trade disputes with the US. It indicates a shift in strategy from legal confrontation to a more diplomatic approach, likely in hopes of securing a broader agreement and a potential return of over $7 billion in duties currently held in escrow.
Brazil’s Haddad sees interest rate cuts coming in ‘consistent, sustainable’ way
Brazil’s Finance Minister Fernando Haddad expressed his belief that the country’s central bank will begin cutting interest rates in a “consistent and sustainable way,” but did not provide a specific timeline. He emphasized that Brazil’s economy must grow to address its fiscal challenges and that high borrowing costs are not solely due to fiscal concerns.
Insight
Haddad’s statement reflects the Brazilian government’s desire for monetary easing to stimulate economic growth. However, the lack of a specific timeline and his acknowledgement of the central bank’s independence suggest that rate cuts are not imminent and are dependent on broader economic conditions and the central bank’s assessment of inflation.
US will sanction more Brazilian officials, if necessary, Treasury’s Bessent says
U.S. Treasury Secretary Scott Bessent warned that the U.S. is prepared to sanction more Brazilian officials if necessary, following the sanctioning of the wife of a Brazilian judge. He also stated that Brazilian financial institutions dealing with sanctioned individuals could face sanctions as well, urging them to act with caution.
Insight
This statement indicates an escalation of diplomatic and financial pressure from the US on Brazil, suggesting serious concerns about corruption or other issues within the Brazilian government. The warning to financial institutions shows a willingness to use secondary sanctions to enforce its foreign policy objectives.
Ecuador set to become world’s No. 2 cocoa grower, industry head says
According to the head of Ecuador’s cocoa exporters association, the country is on track to surpass Ghana and become the world’s second-largest cocoa producer. Driven by soaring global cocoa prices, farmers in Ecuador are increasing investment in their plots, leading to higher yields. The country is forecast to produce over 650,000 metric tons by the 2026/27 season.
Insight
This projection highlights a significant shift in the global cocoa market, with production moving away from traditional West African growers like Ghana and Ivory Coast. The reasons for Ecuador’s success—higher prices for farmers and sustainable agroforestry practices—could serve as a model for other countries aiming to increase their agricultural output in a more resilient and profitable way.
