2017: The Year Latin America Bounces Back?

While individual nations in the region are faring differently, the global economic environment has become much more supportive for the region, at least in terms of cyclical momentum.

by Yuwa Hedrick-Wong

In 2016, the buzz was that Latin America had lost much of its glow – the political landscape was changing, economic growth was near zero, and equality gains stalled.

2017, however, may be the year of the comeback for Latin America. While individual nations in the region are faring differently, the global economic environment has become much more supportive for the region, at least in terms of cyclical momentum.

Key developments in this regard include:

The collapse of the commodity super-cycle that started in 2011 has stabilized. China, the pivotal consumer of commodities in the last three decades, has been transiting into a lower but more sustainable level of growth at the 6-7% range in real GDP. This has led to steadily firming levels of commodity prices.

In the US, it is becoming evident that President Trump has inherited a very strong economy well on its way to full employment. The earlier than expected normalization of interest rates will further facilitate stronger business investment.

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