The Latin America outlook shows that economic growth will moderate in 2022 after the rebound experienced in 2021, buoyed primarily by five cyclical factors:

  1. More sustainable reopening on the back of 80%+ full vaccination rates by Q1 2022
  2. Investment recovery in the service sector, which will boost employment and help sustain consumption
  3. Ongoing stimulus as governments garner popular support ahead of landmark elections
  4. Still-low interest rates even despite expected rate hikes
  5. Still-high commodity prices in 2022

Stubbornly high inflation—stemming from still-unresolved imbalances in global supply chains and energy markets—and political developments remain the most important risks to next year’s outlook. Companies will be able to find safer havens among countries, industries, and customer segments as they prioritize long-term investments in Latin America.

Our analysts are constantly evaluating changing market trends to ensure you have the most updated and relevant information for your strategic decisions. Keep reading for our analysis of the key trends in Latin America that you need to pay attention to.

Cyclical factors—notably, more sustainable economic reopening—will sustain growth in 2022

As the region approaches 80%+ full vaccination rates, countries will be able to more sustainably reopen their service sectors, where most jobs concentrate. Together with still-expansionary government spending and still-high commodity prices, Latin America will be able to grow at 2.6% in 2022, after the 5.7% rebound in 2021.

Inflation and politics remain the most important risks to next year’s outlook

Supply-chain bottlenecks stemming from faster-than-expected recovery have resulted in heightened freight and raw materials costs. A recent surge in global energy prices is solidifying our view that inflationary pressures will persist throughout 2022. Chile’s, Argentina’s, Colombia’s, and Brazil’s elections will dictate investor confidence.

Companies should expect greater divergence across LATAM countries after the dust settles in 2023

As companies assess the ROI of long-term investments across markets in LATAM, a few countries are emerging as lower in risk from debt sustainability and social stability standpoints. Governments can improve their risk perceptions, but how they do so will greatly influence business opportunity and the cost of doing business in different countries.

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