Citibank revealed its economic outlook for Latin America, including specific results estimated at the end of 2023 for certain countries, including Peru, citing that China’s slowdown may affect Latin America’s emerging economies.
“It’s not good for Latin America because of its consumer demand. We thought China would grow 6%, but it will grow 5%. They are far from returning to their average growth of the last 20 years,” Ernesto Revilla, chief economist for Latin America at Citi, said.
“There is good news for Latin American countries globally, but it comes from the United States and the Eurozone. We thought the US would go into recession in 2023, but its economy remains resilient. In Europe, the winter was lighter than expected, and they managed to rebuild their energy inventories. It wasn’t a heavy fall,” Revilla added.
Recently, the Chinese Customs Service reported that the commercial exchange in dollars between the Asian country and the rest of the world contracted 13.6% in July. In the case of exports, they fell by 14.5% in July, while imports fell by 12.4%.
Citi expects a counterweight that could favor the region during the next year: the prices of raw materials such as copper, gold, and oil.
“We believe they will return to 2021 levels in 2024. This year, we see a lot of stability in copper prices, for example,” Revilla predicted.
“There will be a separation between China’s growth and metal prices. It will be interesting because they no longer demand as much raw material as before and their growth is more oriented to domestic demand,” he said.
The current process of transition to renewable energy that the planet suffers from will also favor copper because it increases the demand for batteries, according to Citi.
