(MENAFN – The Rio Times) JPMorgan Chase & Co. has published a report on the economic challenges facing major Latin American countries as they prepare for 2025 budget discussions.
Brazil, the largest economy in the region, is struggling to manage its budget due to reliance on temporary revenue sources. JPMorgan doubts Brazil’s commitment to long-term fiscal stability, predicting a decline in its primary balance by 2025.
Mexico faces a spike in its deficit as it enters an election year, needing significant cuts while preserving essential social programs. To address this, JPMorgan anticipates major reductions in spending, especially in infrastructure, aiming for a deficit reduction down to 4% of GDP.
Argentina’s new government is aiming for fiscal discipline and hopes to achieve a balanced budget in the near term, despite challenges such as managing debt repayments.
In Colombia, JPMorgan warns of fiscal risks due to overestimated revenues, resulting in budget cuts. Chile plans to reduce its fiscal deficit, but at a slower pace than expected, with a forecast of 1.3% of GDP for 2025.
Peru is targeting a fiscal deficit of 2.8% of GDP by year-end but is optimistic about revenue growth, predicting a 2.2% deficit for the following year. High interest payments and public debt could complicate fiscal consolidation for many countries.
JPMorgan also highlights risks from lower commodity prices, particularly affecting countries that rely on commodity royalties. Overall, balancing fiscal discipline with social needs and economic growth will be essential for Latin American governments in the years ahead.
`
