Goldman Sachs cuts LatAm growth forecasts

The economics team at Goldman Sachs cut its 2019 growth forecasts for Latin America's largest nations.

For Brazil, the region's biggest economy, Goldman Sachs reduced its forecast to 2.2% from 2.6%.

"The downward revision takes into account: weaker momentum and lower statistical carry-over from 2018; recent weather-driven downward revisions to major crop yield forecasts; deeper than expected contraction of activity in Argentina (a major market for Brazilian manufacturing exports); the negative impact on mining production from Vale's iron ore mine shutdowns following the accident at the Brumadinho dam; and uncertainty about the approval of the pivotal social security reform which will likely take through 1H2019, perhaps longer," said Goldman Sachs in a research note.

For Mexico, the US-based investment bank lowered the 2019 growth prediction to 1.5% from 1.7%.

"Tight monetary policy, exigent credit standards/conditions, and lingering uncertainty and risks ahead, are expected to weigh down on the buoyancy of private consumption spending."

The forecast for Chile's economy was cut to 3.4% from 3.6%, reflecting tighter financial conditions and soft private consumption dynamics.

Meanwhile, it kept the prediction for Colombia of a 2.6% expansion, while seeing a contraction of 2.4% in the case of Argentina.