SAHIC: Reinier Schliesser talks about Risks and economic trends for 2025

One of the highlights was the lecture by Reinier Schliesser, chief economist at CAF – Development Bank of Latin America and the Caribbean, who provided an in-depth analysis of the global and regional scenario.

Schliesser stressed that 2025 will be a year marked by significant global economic risks, influenced mainly by the relationship between the United States and China and by a possible fragmentation of trade. “If we look at the graph, we see that global trade fell after the war in Ukraine, but this fall was even more pronounced between China and the United States than between any other country,” he explained.

He also warned about tighter monetary policy in the US. “The Federal Reserve has been reducing inflation and interest rates since September last year, but the market expects interest rates to fall only 25 basis points this year, as opposed to the 75 basis points forecast last December,” he said. This uncertainty is affecting the cost of credit globally.

Strong growth in Brazil, but challenges persist

Regarding Brazil, Schliesser highlighted strong economic growth in 2024, the best since the recovery from the pandemic. However, he pointed out signs of a slowdown: “Household consumption has fallen due to high interest rates, and investments are held back by fiscal uncertainty.”

Inflation, which recently reached 5% per year, is a concern for the Central Bank. “This is outside the target and threatens the credibility of the institution. That is why the Central Bank maintains high interest rates to control inflation,” the economist highlighted.

Another distinguishing factor of Brazil is the composition of its public debt: “90% of Brazilian debt is domestic, which means that when interest rates rise, the cost of debt also increases considerably.” This makes fiscal adjustment even more challenging.

Macroeconomic challenges in Latin America

In Latin America, central banks are struggling to ease monetary policy. “There is limited room to cut interest rates because inflation is not yet fully under control,” Schliesser said. This is reflected in Brazil, where the central bank has reversed its trend of rate cuts and raised interest rates again to contain inflation.

Furthermore, the fiscal issue remains one of the biggest challenges. “Deficits remain high, and in some countries they are even increasing,” he highlighted. This could compromise growth, external payment capacity and the sustainability of public accounts.

Tourism - high-growth sector amid uncertainty

Despite the challenging global economic outlook, Schliesser delivered an optimistic message for the tourism sector. “Global growth may be 3%, but tourism is projected to grow 9%, making it one of the most dynamic sectors in the global economy,” he said.

He also highlighted the impact of geopolitical uncertainty on the sector, especially on logistics costs and the price of oil. “Although the reduction in oil prices reflects fears of a global economic slowdown, the increase in commodity prices could benefit Latin America,” he explained.

Report and photo: Mary de Aquino.