Latin America's economy is forecast to outgrow the US and Europe in 2026, but significant geopolitical risks, particularly the potential non-renewal of the USMCA, threaten key economies like Mexico.
A supercycle in energy and critical minerals is underway, driven by massive AI-related energy demand and the global energy transition, creating major investment opportunities in lithium, copper, and renewables across the region.
Major economies like Brazil and Argentina are implementing significant pro-investment reforms, including tax consolidation and deregulation, which are expected to unlock hundreds of billions of dollars in new projects.
The region is experiencing a surge in technology investment, with global tech giants building data centers and local firms rapidly adopting AI, while China and India's influence grows in infrastructure, mining, and digital payments.
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Concerns Raised
Failure to renew the USMCA trade agreement, which would damage Mexico's economy and disrupt North American supply chains.
Potential for significant currency devaluations in key markets like Mexico and Bolivia.
Persistent structural issues like poor governance and inadequate infrastructure that limit growth compared to other emerging markets.
High energy costs in industrial hubs like northern Mexico, which hinder competitiveness.
Opportunities Identified
Massive investment in critical minerals (lithium, copper, rare earths) driven by AI and the energy transition.
Deregulation in Brazil and Argentina unlocking billions in stalled energy and infrastructure projects.
Rapid adoption of AI and the build-out of data center infrastructure by major tech companies.
Growing influence of Chinese infrastructure investment (e.g., Peru's Chan Kai Megaport) creating new logistics and mining opportunities.