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Peru faces another political crisis following the presidential vacancy, reflecting recurrent instability since 2017. Although the financial impact was limited, uncertainty is weighing on investment, consumption, and growth. Institutional reforms are urgently needed to strengthen governance and economic stability.

GDP rose 2.1% y/y in Q2 2025, fueled by consumption, especially durable goods. Investment focused on machinery and civil works, but buildings weighed down growth. The 2025 forecast remains at 2.3%, with room for upside if positive trends strengthen.

Colombia’s GDP grew 2.7% in Q1 2025, driven by consumption (76.7% of GDP), while investment remains weak, especially in housing and infrastructure. The key challenge is boosting investment to ensure sustainable growth.

The slowdown in formal employment in Mexico deepened in April, driven primarily by declining investment and growing business distrust. The contraction in key economic sectors and economic uncertainty point to weak job creation throughout the year.

After 6 months in office, the government has made significant progress in improving the fiscal balance, which in turn resulted in a reduction of monetary issuance and a deceleration of inflation. The challenge now is to consolidate the fiscal surplus and dismantle FX-market restrictions to foster sustainable growth.

Mexico's dependence on remittances reached a maximum of 4.0% of GDP in 2022. It is estimated that remittances would represent 3.5% of GDP in 2023 and by 2024 they will reach 3.7%. The appreciation of the Mexican peso (MXN) against the US dollar (USD) has relatively reduced Mexico's dependence on these resources.

There are some positive signals in August activity indicators, suggesting the economy might have passed the worst amid a series of recent policy support.