Latin America offers the best opportunity for emerging-market investments in 2023, according to Nur Cristiani, head of LatAm investment strategy for JPMorgan Private Bank.
She believes, however, that the region will only outperform in relative terms – due to other areas of EM struggling next year – and still expects its GDP to slow down when compared with 2022.
“If we look at Latin America on an absolute basis and compare it against 2022 then we see a worsening outlook – which might seem at odds with our advice to clients that the region is the bright spot in EM. But the key word here is ‘relative’,” she says.
Cristiani is also clear that the opportunity is not homogenous. Indeed, she believes that the coming year will essentially be split into two halves: the first will be driven by the continued strong performance of the US economy, before the second half sees recession arrive in North America, while China takes over the role as main global driver of the global economy.
“Latin America is unique in that it is the only region which is placed to be able to take advantage of both global growth stories,” she says, explaining that this is because Mexico is clearly linked to what happens in the US, while countries such as Brazil will benefit when the China story returns to prominence.
