Latin American Keys is an informative and analytical summary regarding the political and economic situation in the Latin American region. These key takeaways, prepared monthly by ATREVIA´s Analysis and Research team, serve to be a useful tool in understanding the evolution of the political-institutional state of Latin America.
Latin America closes a complex and dynamic 2025, with many issues still open heading into 2026. One example is the long-awaited signing of the agreement between the European Union and Mercosur, initially scheduled for mid-December and how postponed to January.
One of the certainties December has delivered is Chile’s political shift to the right following the victory of José Antonio Kast, where security and immigration were decisive factors. Colombia will elect a new president next year. Despite the defeat of the goverment’s tax and health care reforms, the left leads the polls with Senator Iván Cepeda.
Peru will also hold presidential elections, with 36 candidates registered so far. However, the main political news of the month was the conviction of former presidents Martín Vizcarra and Pedro Castillo. In Brazil, former president Jair Bolsonaro could see his sentence substantially reduced after Congress approved a controversial bill. Lula’s expected veto would open a new legal front before the Supreme Court.
In Argentina, inflation picked up after 18 months of deceleration, and the goverment is pushing a liberal-leaning labor reform that sparked union protests. In contrast, Mexico moved forward with legislation to reduce the workweek to 40 hours. It also approved tariffs on Asian products, a gesture toward the U.S. ahead of USMCA negotiations, though criticized by Beijing.
Paraguay also strengthened ties with Washington after signing a security cooperation agreement. The country led the region in economic growth this year, a trend expected to continue. Uruguay likewise stands out regionally, with its minimum wage set to remain the highest in South America next year, while inflation has stayed within the target range for 30 consecutive months.
Seeking to join this growth path, Ecuador signed agreements and streghtened relations with Peru and the UAE, and secured financing form the IDB and CAF.
In addition to delaying the Mercosur agreement, the EU announced stricter controls on imported food products, significantly affecting Latin American exporters. It also postponed the implementation of its Deforestation Law by one year, giving producers in the region more time to adapt.
