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LATAM Regional Outlook for 2020

DuckerFrontier, October 24, 2019

Latin America is expected to grow at a slightly higher pace in 2020 compared to 2019, buoyed by Brazil’s faster recovery. Relative to past years, central banks in Latin America are better equipped to encourage consumption and investment through lax monetary policy, though governments will likely remain somewhat fiscally constrained.

Brazil's long overdue recovery in 2020 will present new growth opportunities for MNCs. Graph showing Real GDP grwoth, % YOY (2020 vs 2019).

Investments that multinationals put off in 2019 because of policy uncertainty are likely to continue to be postponed in Argentina and Mexico but we encourage multinationals to consider increasing their exposure in Brazil and Colombia, and potentially in Peru and Chile as well if current social and political turmoil affecting both countries subsides. Certain countries in Central America and the Caribbean such as Panama and the Dominican Republic will continue to outpace regional growth.

Brazil

We expect Brazil to show economic acceleration into 2020 following the passage of pension reform. The Brazilian economy is expected to accelerate to 2.5% in 2020 from 1.1% in 2019, and could accelerate even more in the event of a prompt tax reform in 2020.

Colombia

Growth has stabilized in 2019 and is expected to remain at moderate levels in 2020 at around 3% year-on-year. Colombia will continue benefiting from a business-friendly administration that will continue to create investment incentives for multinationals.

Peru and Chile

If Peru and Chile can quickly overcome their current political and social crisis, they will continue to be well positioned to attract corporate investment given their strong macroeconomic fundamentals. However, weak growth relative to the past will continue to pose a risk for social stability given frustrated aspirations of the middle class in these countries, particularly in Chile. In Peru, president Vizcarra is likely to emerge victorious from the current political turmoil and complete his term in office.

Given still-weak growth fundamentals in 2020, as executives make the case for investment they should focus on their track record of outperformance in Latin America. DuckerFrontier has outlined five strategic imperatives for LATAM executives to help build resilience and responsiveness into their 2020 plans and win in their most important markets:

  • Consider resilience in market prioritization
  • Capture opportunities created by digitalization
  • Encourage customer centricity
  • Increase responsiveness of your organizational footprint
  • Strengthen government engagement

Effective risk-tracking, market monitoring, and course-correction capabilities will also be paramount to  improve the prospects of achieving targets despite increasingly more common external surprises.


The LATAM Regional Outlook is just one in our series of 2020 outlooks. Over the next several weeks we will be sharing more Regional Outlooks to help you and your regional teams with your strategic planning for next year. See what our Global Economics and Scenarios team is predicting for the global economy in 2020.

For more strategic priorities as you build your 2020 plans, purchase the full LATAM Regional Outlook from our online store.

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