Brazil and Mexico are the countries with the greatest expansion in latinamerican region

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17 April, 2024

Brazil and Mexico are the countries with the greatest expansion in latinamerican region

Brazil and Mexico surprised investors with higher-than-expected growth, this phenomenon due to agriculture and manufacturing. Brazil’s economic activity grew by 3.3% in February compared to the previous month, according to the central bank’s index.

Mexico’s economy expanded by 1.1% in the first quarter versus the previous three-month period.
The growth figures surprised investors amid moves by both central banks to maintain tight monetary policy to curb above-target inflation.

The reasons for the boost in the economies of these two countries is that Brazil’s new government is working to renew credit flows. Meanwhile, Mexico has benefited from sustained U.S. demand.

Both economies have sharply increased their interest rates to curb post-pandemic inflation: Brazil’s borrowing costs stand at 13.75% and Mexico’s at 11.25%, among the highest rates in the Group of 20 countries.

While Brazil’s Central Bank report does not provide a detailed breakdown, earlier data from the Brazilian Institute of Geography and Statistics (IBGE) showed that services rose 1.1% in February from the previous month, although retail trade fell 0.1%.

The Mexican economy has recorded six consecutive quarters of growth, the longest period under the administration of President Andres Manuel Lopez Obrador.

The expansion was underpinned by the services sector, which grew by 4.4% y/y in the first quarter, while manufacturing rose by 2.7% and the agricultural sector by 2.4%.

For the Mexican nation, the driving force behind its economic expansion was the foreign marketing of products manufactured in the country, especially to its main trading partner, the United States, with record exports of US$53.6 billion in March of this year.

Bloomberg.