This will be motivated, according to the analysis, by a weakening of external demand for EU exports, lower foreign direct investment flows and more unfavorable credit conditions.

According to the firm, although the region's growth will remain in positive territory, the risk of recession remains latent in the event of a downturn in the main world locomotives.

This weakening of external demand for Latin American exports will affect exporting countries to a greater extent. Those that enjoy the sale of raw materials "will be affected" by the decrease in international prices, which in turn, "will result in lower revenues for the governments of the region", which at the same time represents a smaller margin to mitigate the external impact.

The report also indicated that investment flows to the region will slow as the outlook for the region "darkens and risk aversion increases".

"Latin America will still face the monetary brake imposed by central banks to bring inflation down and bring it back to target", the document noted.

Against this backdrop, the study indicated that Latin America will only expand its GDP by a modest 1%, a clear deceleration after having expanded by 3.8% in 2022.

At the same time, the report put the spotlight on China's reopening, supported by the lifting of the "zero Covid" policy: "This will give relief to the main South American countries, allowing them to remain in positive territory in 2023", especially for Brazil and Argentina, whose main trading partner is currently the Asian giant.

Translated by: A.M