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IMF Downgrades Chile’s 2026 Economic Growth Forecast to 1.8%

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The International Monetary Fund (IMF), in its recently released 2026 Article IV Consultation report, has downgraded Chile’s economic growth forecast for 2026 to 1.8%, down from its previous projection of 2.2%. At the same time, the IMF projects a rebound to 2.6% in 2027. This marks the second downward revision of Chile’s growth outlook by the IMF this year.

Slowing Growth Amid Multiple Headwinds

In its report, the IMF noted that while Chile’s economy remains resilient, growth momentum is weakening due to a confluence of factors. Data shows that Chile’s GDP grew by 2.5% in 2025, driven largely by robust non‑mining domestic demand. However, after entering 2026, conflicts in the Middle East pushed up energy prices, fueling inflation. Although inflation had fallen back within the central bank’s target range in early 2026, it subsequently overshot the target again due to rising energy costs.

At the same time, domestic economic indicators are also concerning. The latest Economic Expectations Survey from Chile’s central bank shows that experts project the economy will grow by only 1.3% in 2026, with an unemployment rate of 9.4% and annual inflation still at 4.3%, above the central bank’s 3% target. The economic activity index (Imacec) has now declined for five consecutive months.

Copper Prices Offer Support, with a Rebound Expected in 2027

Despite the dimmer short‑term outlook, the IMF maintains a relatively optimistic view of Chile’s medium‑term economic trajectory. The report projects that, supported by factors such as rising copper prices, Chile’s economic growth will rebound to 2.6% in 2027. As the world’s largest copper producer, Chile’s economy is closely tied to copper price trends, and sustained strength in international copper prices could provide important momentum for economic recovery.

The IMF also warned that if high oil prices persist longer than anticipated, they could further dampen growth and fuel inflation, and the central bank should stand ready to tighten monetary policy as needed. The report added that external risks remain tilted to the downside, with geopolitical conflicts and global supply chain disruptions posing major threats.

Fiscal Consolidation Challenges Remain; Structural Reforms Called For

On the fiscal front, the IMF noted that Chile’s fiscal deficit persists, mainly due to lower‑than‑expected fiscal revenues, although public debt levels remain moderate. To achieve the government’s stated goal of reaching fiscal structural balance by 2030 and keeping the debt‑to‑GDP ratio below 45%, the IMF said “additional fiscal efforts” are still required.

The IMF Executive Board recommended that the Chilean authorities continue to rebuild fiscal and external buffers, including by pressing ahead with reserve accumulation plans, while advancing structural reforms to enhance long‑term growth potential. The report also suggested that the government prioritise and sequence reform measures prudently under the national reconstruction plan, and carefully assess the fiscal costs and growth impacts of tax and other reforms.

Government Response: On the Right Track, Confidence Unshaken

In response to the IMF’s downgrade, the Chilean government sought to play down concerns. Arturo Squella, President of the ruling Republican Party and a senator, said, “When an international organisation emphasises that Chile is making the right decisions, it shows that we are on the right track.” The government insisted that Chile’s economic fundamentals are sound and that there is no risk of recession.

However, market analysts pointed out that, against the backdrop of a slowing global economy, inflationary pressures, and a weak domestic job market, the performance of Chile’s economy in the second half of the year still faces considerable uncertainty. The upcoming release of the June economic activity monthly index will be a key indicator for judging whether the economy can regain growth momentum before the third quarter.

Paraguay’s Guarani Becomes One of Latin America’s Best‑Performing Currencies in 2026, Putting Pressure on Exporters

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Since the start of 2026, Paraguay’s currency, the guarani, has strengthened steadily against the US dollar, making it one of the best‑performing currencies in Latin America. According to Bloomberg data, as of July 2026, the guarani had appreciated by 8.58% against the dollar, ranking third in the region, behind only the Colombian peso (+14.60%) and the Costa Rican colón (+10.17%), and ahead of the Brazilian real (+6.95%) and the Mexican peso (+2.64%).

In its latest economic outlook, Citi Bank noted that the dollar is expected to remain weak over the next 12 to 18 months, a trend that could further boost the guarani and ease imported inflation. Ernesto Revilla, Citi’s Chief Economist for Latin America, said that the current dollar weakness is favorable for the currencies of raw‑material exporters in the region, as high international commodity prices combined with a softer dollar improve the region’s terms of trade.

The guarani’s appreciation is mainly driven by strong export revenues. In June 2026, Paraguay recorded a trade surplus of US$47.09 million, with exports rising 25.1% year‑on‑year to US$1.74 billion, driven by larger shipments of soybeans, soybean oil, and other agricultural products. In addition, after Paraguay obtained an investment‑grade rating last year, foreign investor interest has continued to grow, further boosting foreign‑exchange inflows. Former Finance Minister Ferreira noted that the massive soybean harvest this year brought in substantial dollar inflows, making the guarani’s depreciation twice that of other countries.

However, a stronger currency is a double‑edged sword for Paraguay’s economy. While importers benefit, exporters are under pressure because their dollar revenues shrink when converted into local currency. Paraguay’s Exporters’ Chamber has already held meetings with the central bank to voice the industry’s concerns. Analysts point out that Paraguay’s economy is heavily dependent on agricultural exports—soybeans and beef account for more than 70% of total exports—so a sustained appreciation may erode its export competitiveness.

Looking ahead, Citi believes that the current favorable exchange‑rate environment is likely to be maintained in the short to medium term. However, the currency’s trajectory still depends on external factors such as US Federal Reserve monetary policy and the global economic situation. Balancing the inflation‑relief benefits of currency appreciation against the loss of export competitiveness will remain a key challenge for Paraguay.

Brazilian President Lula Criticises Trump’s Strait of Hormuz Toll Plan, Says the US “Cannot Turn Itself into a Pirate”

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Brazilian President Luiz Inácio Lula da Silva publicly criticised US President Donald Trump’s plan to impose a 20% toll on all goods transported through the Strait of Hormuz, calling the move “the behaviour of a pirate nation.”

Speaking on 13 July at an event at the Mauá Institute of Technology in São Caetano do Sul, São Paulo state, Lula responded to Trump’s social‑media post. Earlier that day, Trump announced on Truth Social that the United States would restore a naval blockade on Iran and charge a 20% fee on all cargo passing through the Strait of Hormuz, declaring that the US would become the “guardian of the Strait.”

In his speech, Lula said bluntly: “President Trump’s post says he will open the Strait of Hormuz. But for every ship that is allowed through, for every ship that leaves the strait, the owner of the oil must pay him 20%. That used to be called piracy.” He added: “A great power like the United States, which for so long fought against pirates, cannot now turn itself into a pirate.” Lula emphasised that the strait was never closed in the first place, and said: “It was not Brazil that invented this war—he [Trump] invented it.”

Lula also sharply criticised the US for trying to profit from the conflict. He pointed out that it was “neither normal, nor democratic, nor civilised” to see the US provoke a war and then charge so‑called “security fees” on passing vessels. “It is not normal for someone to make money from other people’s misfortune,” he stressed.

Beyond the moral criticism, Lula also highlighted the real economic impact of the conflict on Brazil. He said that the wars launched by the US and Israel had pushed up fuel and food prices in Brazil. After the Iran war caused international oil prices to spike sharply, the Brazilian government announced a series of temporary measures to control domestic fuel‑price increases. Lula revealed that the government had imposed a 12% tax on crude oil exports starting in March this year, and the revenue from that tax is being used to cushion the impact of rising oil prices on the domestic economy.

Analysts note that the Strait of Hormuz is one of the world’s most critical oil‑transport chokepoints, handling a large share of global crude oil and liquefied natural gas shipments. Trump’s toll plan has not only sparked widespread international controversy but could also further escalate tensions in the Middle East and push global energy prices even higher.

ECLAC Warns Latin America Faces Another ‘Lost Decade’

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UN agency says regional average GDP growth was just 0.9% between 2014 and 2024, urges countries to prioritise growth

SANTIAGO — July 13, 2026. The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) has issued a stark warning that the region is at risk of another “lost decade,” urging governments to urgently step up resource mobilisation to avoid falling into a prolonged low-growth trap.

According to ECLAC’s 2025 Preliminary Overview of the Economies of Latin America and the Caribbean, the region’s average annual GDP growth between 2014 and 2024 was a mere 0.9% – even lower than the levels recorded during the debt crisis of the 1980s. ECLAC projects regional economic growth of between 2.2% and 2.4% for 2025, with a further slowdown to between 2.2% and 2.3% in 2026. Should this forecast materialise, the region would register four consecutive years of low growth of around 2.3%. ECLAC Executive Secretary José Manuel Salazar-Xirinachs said that amid global uncertainty and geopolitical tensions, Latin American countries must “prioritise” economic growth. He noted that governments, regardless of their political leaning, must place a high priority on growth, and that Latin America must “restart economic growth from within,” rather than relying solely on improvements in global markets or commodity prices.

The report specifically highlighted that the Caribbean (excluding Guyana) faces an even bleaker outlook, with growth of only 1.8% and 1.7% projected for 2025 and 2026 respectively, weighed down by tourism volatility, high logistics costs, and climate vulnerability. ECLAC warned that without urgent action, Latin America and the Caribbean could face its third “lost decade” since the 1980s. The commission called on countries to strengthen productive development policies and promote a more inclusive and sustainable growth model. However, the outbreak of the Iran war in April 2026 has further intensified economic pressures on the region. ECLAC downgraded Brazil’s 2026 growth forecast to 2% in April, down from 2.3% in 2025. The Middle East conflict has pushed up energy and food prices, eroding household purchasing power and compressing already limited fiscal space.

Analysts point out that the root causes of the region’s prolonged growth weakness lie in low investment rates, sluggish productivity growth, infrastructure gaps, and fragile institutional capacity. ECLAC argues that the current low growth is not merely an economic problem but a development crisis.

El Niño Could Cut Brazil’s Record Coffee Harvest by One-Fifth

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Industry association warns extreme heat and erratic rainfall threaten production, though growers are better prepared than in past events

SÃO PAULO — July 13, 2026. The Brazilian Coffee Industry Association (Abic) has warned that the intense heat and erratic rainfall brought by the El Niño phenomenon could slash Brazil’s record expected coffee harvest by as much as one-fifth. Brazil’s National Supply Company (Conab) had previously forecast total production of 66.7 million bags (each weighing 60 kg) of arabica and robusta coffee for this year. Abic Executive Director Celírio Inácio da Silva said: “We are now talking about crop losses of 15% to 20%. In a normal year this might be within expectations, but under the current scenario, it is very bad news.”

Despite the gloomy outlook, coffee growers are better prepared than during previous El Niño events, thanks to technological advances that have produced more climate-resilient crops. Da Silva noted: “We have made significant progress and can now plant and harvest more efficiently.” In recent years, growers have rapidly expanded irrigation systems to bolster resilience against climate risks, investing heavily in such technologies to reduce reliance on increasingly erratic rainfall. Even so, El Niño is still expected to disrupt the biological cycle of the crop, particularly during the flowering period in the second half of 2026. Experts say extreme heat and irregular rainfall could lead to uneven or failed flowering. Wellis Caixeta, coffee procurement manager at the Expocacer cooperative in Minas Gerais state, said: “Uneven maturation creates quality problems and makes harvesting more difficult.”

The 2023–2024 El Niño, combined with heatwaves and irregular rainfall, had already reduced Brazil’s 2024 coffee harvest from the government’s initial forecast of 58.8 million bags to 54.2 million bags. Arabica beans, despite being in a positive biennial cycle, saw production increase by only 0.2%, while conilon productivity fell by 5.9%. Luís Carlos Bastianello, president of Cooabriel, Brazil’s largest conilon coffee cooperative, said that Espírito Santo state – the country’s largest producer of conilon – is also facing erratic weather this year, with longer intervals between rains and more concentrated downpours. Growers in the state fear El Niño could extend dry spells and extreme heat into January 2027, disrupting bean filling. Bastianello pointed out: “High temperatures are the biggest risk for severe crop losses. Conilon metabolism slows above 27°C and stops entirely at 35°C. Damage from heat is often greater than from water shortage itself.” Brazil’s Central Bank Governor Gabriel Galípolo has identified El Niño as one of the important risk factors affecting future inflation trends.

Brazil Launches Multiple Anti-Dumping Investigations Against China

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Probes cover welded steel pipes, lactic acid, PET resin, and safety glass, signalling rising trade friction

BRASÍLIA — July 13, 2026. Brazil has recently launched a flurry of anti‑dumping investigations and reviews against a range of products originating from China, covering welded carbon steel pipes, lactic acid and its salts, PET resin, and safety glass for refrigeration equipment – signalling a marked rise in trade tensions between the two countries.

On July 6, 2026, Brazil’s Foreign Trade Secretariat (SECEX) issued Circular No. 51 of 2026, initiating an anti‑dumping investigation into welded carbon steel pipes imported from China, following a petition filed by Brazilian company Confab Industrial S.A.-Tenaris. The products in question are circular‑section welded steel pipes with a yield strength below 60 ksi and nominal outside diameters ranging from 14 inches (355.6 mm) to 48 inches (1,219.2 mm). The dumping investigation period covers July 2024 to June 2025, while the injury investigation period spans July 2020 to June 2025.

Earlier, on June 29, 2026, SECEX issued Circular No. 48 of 2026, initiating an anti‑dumping investigation into lactic acid and its salts originating from China, following a petition filed by Brazilian company Corbion Produtos Renováveis Ltda. The products fall under Mercosur tariff code 2918.11.00, with the dumping investigation period set from July 2024 to June 2025. On June 17, 2026, Brazil also initiated a changed‑circumstances review of anti‑dumping duties on PET resin with an intrinsic viscosity of 0.70 to 0.88 dl/g originating from China, following applications from Alpek Polyester Pernambuco S.A. and Indorama Venture Polímeros S.A.

In addition, on June 24, 2026, the Executive Management Committee of Brazil’s Foreign Trade Chamber (GECEX) issued Resolution No. 921 of 2026, concluding a second sunset review of anti‑dumping duties on safety glass for refrigeration equipment originating from China. The ruling maintains duties of US$2.74 to US$5.45 per square metre for a period of five years. The products fall under Mercosur tariff code 7007.19.00. Analysts note that Brazil’s intensified use of trade remedies against Chinese products reflects growing pressure on its domestic industries from Chinese imports. The petitioner in the welded steel pipe case, Tenaris, is a globally leading pipe manufacturer, and its Brazilian subsidiary’s filing is considered industry‑representative. As protectionist sentiment rises among Brazilian industries, more Chinese products are expected to face trade investigations in the future.

Carlos Slim Helú: Latin America’s Richest Person

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As a heavyweight in the global business world, Mexican telecom magnate Carlos Slim Helú and his family continued to hold the title of Latin America’s richest person in 2026.

Staggering Wealth: According to the Forbes 2026 Billionaires List, Slim’s net worth reached $125 billion**. In real-time data, this figure even peaked at **$126.1 billion.

Global Ranking: This level of wealth firmly places him among the top 20 richest people in the world in 2026.

Source of Wealth: His fortune primarily stems from his control over telecom giants América Móvil and Telmex, while he also has extensive holdings in Mexico’s infrastructure, consumer goods, mining, and real estate sectors.

Economic Impact: Reports indicate that his personal net worth is equivalent to approximately 6.7% of Mexico’s gross domestic product (GDP), underscoring his immense influence on the country’s economy.