The last quarter of 2017 surprised even the most optimistic observers. However, the positive performance of that period does not preclude a sense of uncertainty for 2018, a year that will likely prove decisive for the region.
Largely thanks to the recovering prices of some key commodities, the region recorded a positive first quarter in 2018, with the IMF forecasting Latin America and the Caribbean’s GDP growth for the year to reach 2%. Currency volatility remains among the primary challenges, however, offsetting some gains. The economy is thus centre stage in countries headed to the polls this year, potentially ushering in a period of economic transformation in several of the region’s major players.
With the Argentine peso in free fall, the beginning of May was a tumultuous time for the country. Even though the central bank continued to sell its reserves and raise interest rates, the depreciation of the currency appeared unstoppable.