Latin America’s economy is forecast to grow by 2.2% in 2025, according to Moody’s Analytics, marking a modest improvement from earlier projections of 2.1%. While most major economies are expected to record positive growth, performance will diverge significantly across the region, with Argentina and Peru standing out as leaders.

Argentina is projected to expand by 5.2% in 2025, a figure that reflects a rebound after consecutive contractions in 2023 (-1.6%) and 2024 (-1.7%). Moody’s noted that stabilisation measures have reduced inflation sharply since late 2024 and supported a recovery in credit, laying the foundation for medium-term growth of around 3.5% annually through 2027. In contrast, Mexico is expected to see almost no growth this year, with GDP rising by only 0.1%. Analysts attribute this to reduced public spending, investment weakness, and uncertainty over tariffs, despite temporary support from social transfers and remittance flows.

Peru, meanwhile, has emerged as one of the most dynamic economies in the region. Official data from the Instituto Nacional de Estadística e Informática (INEI) show GDP expanded 4.52% in June 2025 compared with the same month of 2024, the strongest monthly performance since March (INEI). This pushed first-half growth to 3.3%, in line with the revised government target of 3.5% for the full year, though lower than the 4% originally projected.

The June expansion was broad-based. Primary sectors grew 5.7%, led by fishing (+33.7%) and primary manufacturing (+14.3%), supported by a strong anchovy catch. Agriculture rose 8.8%, driven by higher blueberry and cocoa production, while metallic mining advanced 1.9% on stronger copper, zinc and gold output. Construction surged 9.6%, fuelled by higher cement consumption and increased public works, while non-primary manufacturing grew 4.8%. Services and commerce also contributed, expanding 2.4% and 3.1% respectively, underpinned by resilient private consumption and employment gains.

Exports added momentum, with shipments rising 13.3% in June. Traditional exports, including copper and gold, grew by 14.9%, while non-traditional sectors such as chemicals, textiles and fisheries advanced 9.4% (INEI). Business sentiment has remained consistently optimistic, with indicators of expectations at both three and twelve months in the “positive” range for over a year, according to the Ministry of Economy.

Elsewhere in the region, Brazil is forecast to grow 2.4% in 2025, supported by strong labour market conditions despite high inflation and fiscal pressures. Colombia’s GDP is projected to expand 2.6%, while Chile is expected to grow 2.4%, aided by high copper prices. Uruguay is seen advancing 2.1%.

Overall, Moody’s highlighted that the first quarter of 2025 delivered stronger-than-expected results across several economies, with regional GDP expanding 3.1% year-on-year, surpassing December forecasts of 2.6%.