(MENAFN– The Rio Times) JPMorgan Chase & Co. released a report on the financial challenges facing major Latin American economies as they prepare for 2025 budget discussions.
Brazil, the largest economy in the region, is trying to reduce spending but relies on one-time revenues, raising doubts about its ability to sustain fiscal stability, with predictions of a worsening balance in 2025.
Mexico, having avoided stimulus during the pandemic, now faces increased deficits due to upcoming elections. The new government needs significant cuts, especially in infrastructure, to reduce the deficit to 4% of GDP. Argentina’s Javier Milei plans to achieve fiscal discipline, aiming for balance soon despite challenges with debt management.
Colombia is experiencing fiscal risks as the Treasury has overestimated revenues, leading to budget cuts. Chile intends to reduce its deficit slower than expected, with JPMorgan predicting a 1.3% deficit of GDP in 2025.
Peru aims to cut its fiscal deficit to 2.8% of GDP by year-end and expects improved revenues, forecasting a 2.2% deficit for next year. However, high-interest payments and public debt could complicate consolidation efforts. Lower commodity prices may also negatively affect government finances, especially in commodity-dependent countries.
Latin American governments must balance financial stability with social needs and growth in the coming years amidst global uncertainty.
