The International Monetary Fund “IMF” Projects 2.5% Economic Growth for Latin America in 2025

By Karla Ramos  |  January 20, 2025

The International Monetary Fund (IMF) has projected a modest economic growth rate of 2.5% for Latin America in 2025, signaling a continued recovery amid global economic challenges.

The forecast, outlined in the IMF’s latest World Economic Outlook, highlights the region’s resilience in navigating external pressures, including inflation, geopolitical tensions, and slower global demand.

According to the report, the region’s performance will be shaped by varying national trends.

Economies like Brazil and Mexico are expected to see steady growth driven by strong domestic demand and favorable commodity prices, while smaller nations could face headwinds from fluctuating trade volumes and financial vulnerabilities.

Central America is likely to benefit from robust remittance flows and ongoing recovery in the tourism sector, remarked the report.

However, the IMF emphasized the need for structural reforms to bolster long-term growth. Key recommendations include strengthening institutions, promoting private investment, and addressing income inequality.

The IMF also urged governments to remain vigilant against inflationary pressures and global market volatility.

SEE ALSO: El Salvador Credit Ratings

Latin America’s economic outlook comes amid broader global challenges, with the IMF predicting global growth to hover around 3%.

For the region, achieving sustainable growth will depend on its ability to adapt to shifting dynamics and implement forward-looking policies.

The 2.5% growth projection underscores cautious optimism but also highlights the work ahead to ensure economic stability and progress.

The IMF projects a 2.7% economic growth for El Salvador in 2025, marking the lowest rate in Central America. In comparison, Guatemala is expected to grow by 4%, followed by Honduras at 3.6%, Costa Rica at 3.5%, and Panama at 3%.