LatAm Poised for Take-Off | Idea Farm

LatAm Poised for Take-Off

Citi

Research

57 Pages

September 2026

The authors argue Latin America has its best growth setup in decades as a weaker dollar, strong commodities, trade rewiring, and improving policy frameworks align. Growth remains near 2%, but the region’s macro backdrop, carry, and valuations could support a broader market re-rating if reforms and fiscal execution follow.

Key Takeaways

Weak dollar helps: The USD weakened nearly 9% from January 2025 to August 2026, historically a favorable backdrop for LatAm growth and convergence.

Carry stays compelling: Real rates are about 10% in Brazil, 6% in Colombia, 2.5% in Mexico, and 2% in Peru.

Equities have precedent: During 2003–2013, MSCI LatAm returned 5.8x from trough to peak, driven by 3.3x EPS growth and 1.8x P/E expansion.

Markets Emerging Markets International Markets

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