Fitch forecasts weakened economic outlook for Latin America in 2024

SANTIAGO (Reuters) - Ratings agency Fitch Ratings forecasts a decline in economic growth across Latin America this year amid dampened demand, high borrowing rates and considerable exposure to China and the U.S., which are also facing a slowdown.

The agency put its average 2024 growth forecast for the region at 1.5%, down from 2.3% in 2023.

Fitch Managing Director Shelly Shetty said that expected declines in larger economies like Mexico and Brazil have weighed down the region's overall forecast. Fears over a recession in Argentina under the new government of Javier Milei also had an impact.

Shetty added that in the medium term, Latin America had several aspects working in its favor, including relative geopolitical calm, a wealth of commodities needed for the "green transition," and a shift in manufacturing from Asia to Mexico.

However, the agency stressed that much of the region could struggle to capitalize on these advantages due to state interventionism, limited reform and political disagreement, with the notable exception of Brazil.

(Reporting by Juana Casas; Writing by Isabel Woodford; Editing by Marguerita Choy)