Helping clients meet their business challenges begins with an in-depth understanding of the industries in which they work. That’s why KPMG LLP established its industry-driven structure. In fact, KPMG LLP was the first of the Big Four firms to organize itself along the same industry lines as clients.

How We Work

We bring together passionate problem-solvers, innovative technologies, and full-service capabilities to create opportunity with every insight.

Learn more

Careers & Culture

What is culture? Culture is how we do things around here. It is the combination of a predominant mindset, actions (both big and small) that we all commit to every day, and the underlying processes, programs and systems supporting how work gets done.

Learn more

Global Navigator from KPMG Economics

Global growth is expected to stabilize in 2024, remaining close to the pace we hit pre-pandemic during the year.

March 2024

Welcome to Global Navigator, a monthly newsletter from KPMG Economics. Each month we will share expert analyses on the evolving global economic landscape, providing timely insights into trade dynamics, cross-border trends and the impact of global monetary policy, along with a deep dive into the economic outlook for key regions. Designed for multinational executives, our aim is to guide you through the complexities of the global economy, helping you stay informed and helping your business seize opportunities in this dynamic international landscape.

Global growth is expected to stabilize in 2024, remaining close to the pace we hit pre-pandemic during the year.

Topics We Are Watching 

This inaugural edition of Global Navigator explores three critical topics and their potential impact on the world economy, with a specific focus on Latin America.

  1. Global growth is poised to slow only slightly. Global growth is expected to slow slightly from a 2.7% annual average in 2023 to a 2.5% pace in 2024, the same as the pre-pandemic 2.5% pace in 2019. Many of the hardest hit economies by the pandemic recession, notably in Latin America, are expected to drive gains. 
  2. Central bankers globally weigh rate cuts. Central banks are poised to cut rates in 2024, which will provide a tailwind for growth. Many of Latin America’s largest economies are at the leading edge of those moves, which is already spurring growth, along with increased business investment and a diversification of supply chains.
  3. Risks to the outlook. Central bankers are loath to cut before they know their inflation targets can be met. History is littered with examples of banks that did so only to stoke a more corrosive bout of inflation or worse, stagflation. The desire to cut before inflation has been fully tamed, especially in economies mired in recession, remains the largest risk for central banks both in Latin America and elsewhere. Negative exogenous shocks, from climate changes to escalating armed conflicts and a reduction in global competition, risk reigniting inflation.

Global update: Global growth slows slightly in 2024

In 2024, global growth is expected to decelerate slightly from 2023 and be well under the 2010s average. Even so, the global economy has held up remarkably well amid elevated price levels and higher interest rates. Inflation has come down much more rapidly than expected. Global CPI inflation fell from 9% in Q3 2022 to 5.5% in Q4 2023. Our forecasts suggest inflation will fall to 4.4% at the end of 2024 and 3.2% by the end of 2025. That will enable most central banks to start rolling back restrictive policy by the second half of 2024. The largest headwind is expected to be fiscal policy, which is growing more restrictive as COVID-era and efforts to blunt the effects of the war in Ukraine on energy prices fade. Fiscal consolidation is a heavier lift, as is illustrated by the haggling over the federal budget in the US.

Leaders and laggards: Emerging markets have held up amidst higher rates; developing Asia and Latin America are expected to be leaders due to supply chain diversification. The US has outpaced many of its peers in the Group of 7 in 2023 in terms of real GDP and is on track to do so again in 2024. Growth in the Middle East is highly contingent on containing conflict and attacks on shipping vessels. The Euro area, Japan and Argentina remain laggards.

Global risks: A slowdown in the economy, sudden price shocks, or the persistence of inflation could derail easing of policy rates. The reorientation of supply chains toward geopolitical allies, climate change and escalating hot wars may result in more disruptions and higher inflation. 

Central banks learning from the past in Latin America

Growth in Latin America is expected to accelerate to 2.5% year-over-year in 2024, above the 2.2% pace of 2023. Those Latin American countries that were quick to raise rates have been able to tame inflation; as a result, they are better poised to cut rates and reap the benefits of those cuts now. Chart 1 shows that Chile and Brazil are expected to outpace the US, which has been the leader among the developed economies since the onset of the pandemic. Mexico is behind the US but poised to accelerate in 2025, while Argentina falls behind in 2024. Colombia and Peru are both expected to bounce back from a weak 2023 with steady growth in 2024. Venezuela is likely to benefit from elevated oil prices in the near-term.

Chart 1: LATAM Real GDP Growth Expected to Outpace G7 Index: Q4 2019 = 100

Note: "Real" denotes inflation-adjusted figures. Forecasts are dated as of March 12, 2024, Source: KPMG Economics, Statistical agencies of relevant countries

Most central banks globally have reached the height of their tightening cycles but have not yet indicated when they will begin to roll back restrictive policy. Our forecast indicates that most central banks will begin rate cuts in the latter half of 2024 and first half of 2025. Normalizing rates after a bout of inflation is slower than cutting rates to stimulate the economy. The urgency to cut is lower; policy is expected to remain restrictive across many developed countries through year-end.

Latin America is an outlier on this front. Many central banks in that region raised rates faster than their counterparts in the developed world, tamed inflation and are now well positioned to cut more aggressively.

Inflation in Brazil, Mexico and Chile has now been within shooting distance of their respective targets since Q2 2023. The Banco Central do Brasil (BCB), Banco Central de Chile (CBoC), Banco Central de Reserva del Perú (BCRP), the Bank of Mexico (Banxico) and Colombia’s Banco de la República have all begun to cut rates. Banco Central de la República Argentina (BCRA) and Banco Central de Reserva del Perú (BCRP) have cut rates for an entirely different reason: to stimulate in the face of a technical recession.

The risk of cutting rates too early is reigniting inflation – the cardinal sin of central banking. Several LATAM central banks have historically made that mistake. From the mid-1980s to mid-1990s, Brazil had five different failed economic stabilization plans, five different currencies and hyperinflation, reflecting abrupt policy changes before inflation was under control.

That is what makes Latin America’s position today so remarkable: central banks moved early and aggressively against inflation, learning from the mistakes of the past. The BCB, Banxico and CBoC all got real interest rates into positive territory more than a year ahead of the Federal Reserve. Now these central banks can cut earlier, leaving more room for growth in 2024.

Latin American countries have also been at the forefront of raising minimum wage rates. Brazil, Mexico, Colombia and Chile have recently raised or will raise the minimum wage in 2024. These wage increases could help reduce extreme poverty and inequality in a region where high inequality acts as an economic headwind and restricts output. This could add to wage costs and inflationary pressures but could also hedge against strikes and protests that fuel economic and policy uncertainty.

Another tailwind in Latin America is supply chain diversification. Brazil and Mexico were two out of the four top recipients of foreign direct investment in 2023, allowing for higher growth amidst restrictive monetary policy. Mexico has benefitted from the US-Mexico-Canada Agreement (USMCA), giving a boost to manufacturing and employment growth (similar, albeit more muted trends are observable in Central America).

An outlier in Latin America is Argentina. Argentina’s situation is an example of the dangers in cutting policy rates too early. The central bank is choosing between stimulating in a recession or getting hyperinflation under control. It has chosen the former: BCRA has begun to cut. Our forecasts indicate that inflation, at 254% year-over-year in January 2024, has not yet hit its peak. That is a repeat of history: Argentina has defaulted nine times on its sovereign debt and has been the recipient of over 20 IMF arrangements.

Regional Risks: Given that several Latin American central banks have already begun to cut, the risk of reigniting inflation in the region is higher. More persistent services inflation or a shock to goods/energy prices could boost inflation, while sudden reductions in employment or output or declining demand for exports could spur central banks to cut rates, risking another bout of high inflation. Domestic policy uncertainty and social instability are at elevated risk in this region and could derail the trajectory of growth. An extended period of tighter US monetary policy could result in capital flight, currency and debt issues. This happened in the 1980s and mid-1990s. 

Latin America is expected to accelerate earlier than the rest of the world.

Bottom Line:

Latin America as a whole is expected to be driver of overall economic gains in 2024, aided by a tailwind of rate cuts and a commensurate rebound in business investment. However, gains will remain extremely uneven throughout the region. A key differentiator this year is whether a central bank is cutting after taming inflation or cutting to stimulate a moribund economy. Economies such as Brazil and Mexico will reap the benefits of getting inflation under control earlier, whereas the situation in Argentina will get worse before it gets better. 

Subscribe to insights from KPMG Economics

KPMG Economics distributes a wide selection of insight and analysis to help businesses make informed decisions.

Explore more

Meet our team

Image of Meagan Schoenberger
Meagan Schoenberger
Senior Economist, KPMG Economics, KPMG US
Image of Matthew Nestler
Matthew Nestler
Economist, KPMG Economics, KPMG US

Thank you

Thank you for subscribing. You should receive a confirmation e-mail soon.

Subscribe to insights from KPMG Economics

Now more than ever, companies are using data to make informed decisions about the future of their business. KPMG Economics is continuously monitoring and analyzing economic and geopolitical data so we can provide business leaders with reliable and timely insight and analysis.

To receive our Economic Updates and other relevant content published by the KPMG Economics as soon as it is released, please provide the following details:

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.