Clouds

Overall, the Latin American region is performing strongly and no major black clouds are on the horizon. However, analysts say it will be important to keep an eye on inflation in the major economies amid recent increases in food and energy on the global marketplace, as this could translate into higher consumer inflation in the region. Also, analysts underscore the region remains closely tied to the global economy, especially amid demand from China and India for raw commodities.

“The biggest concern for Latin America is the health of the global economy,” BNP Paribas’ de la Fuente says. “It is ultimately what happens to global growth and the export picture for commodity prices that matters.”

“The risks are located on the external landscape,” agrees Ideaglobal’s Alvarez. “If growth begins to slow you could see some pass-through to Latin America.”
He also says the current concerns that China may be overheating could lead to a bubble bursting.