Citi Research is not hedging. In its September 2026 Must C report, LatAm Poised for Take-Off1, the firm's economists, strategists and two senior business leaders, Julio Figueroa, Head of Latin America, and Kristen Bitterly, Head of the Latin America Private Bank, argue that the region's conditions for growth are the best they have been in decades. The catch, and the report is honest about it, is that the opportunity is not yet showing up in the numbers.
Why Now?
The core diagnosis is that Latin America has failed to converge. In 1990, regional GDP per capita was 28% of the U.S. level. In 2025, it was 26.4%. Emerging Asia added 20 percentage points over the same span. The one sustained exception, 2002 to 2011, coincided with a weak U.S. dollar, and the strong-dollar decade that followed gave every bit of it back. Citi's economists call the dollar "the master variable" for the region, and it has weakened close to 9% since January 2025.
Layered on top: terms of trade at or above supercycle peaks in Peru, Colombia and Chile; real policy rates that are among the highest in the world (Brazil near 10%); central banks that beat post-pandemic inflation ahead of the Fed; a political turn toward business-friendly governments; and a geographic distance from conflict that has made LatAm one of the few regions gaining import share in both the U.S. and China since 2016.
Is the Money Actually Moving?
This is where Figueroa's view from the banking side matters. On nearshoring, he says, "The discussion has evolved. Companies are increasingly moving from evaluating supply-chain strategies toward identifying specific opportunities and developing investment plans." Capex interest clusters in energy and power, critical minerals, infrastructure and logistics, agriculture, and manufacturing.
But he is equally clear about what stalls deployment: "The challenges clients identify are generally less about the underlying opportunity and more about execution and navigating each market's institutional environment." Regulatory clarity tops the list, followed by infrastructure, energy cost, security and FX volatility. His refrain is that "Latin America is not a single market."
On the dollar question itself, corporate clients are not making a directional bet. "The focus is less on predicting the future path of the dollar and more on ensuring that financing structures are aligned with business fundamentals."
Where Does the Wealth Sit?
Bitterly's private bank data cuts against the optimism in an instructive way. "Only about 30% of family office wealth remains strictly within the region. The remaining 70% is held offshore to hedge against political volatility, currency risk and fiscal reform." Miami, New York, Geneva and Madrid remain the booking hubs, with Portugal and Spain rising.
Has a weaker greenback changed that reflex? Not fundamentally. "The foundational reflex to hold wealth in USD has not disappeared because the systemic concerns remain." What has changed is the expression. "There is a distinction between a 'safe haven' currency versus a 'safe haven' jurisdiction," she says, with clients now adding Swiss francs, euros and gold. Meanwhile, Brazil's rates are too rich to ignore: "Many of our clients strike a balance between keeping a portion of liquidity onshore to capture high local double-digit yields while ring fencing core generational wealth offshore."
Her read on sentiment is that "Global investors see the region less as a monolith and more a critical resource provider in a multipolar world."
What Could Go Wrong?
Plenty, and the report says so. Growth remains stuck near a 2% trend. Debt is higher everywhere except Peru, with Brazil near 93% of GDP and Colombia projecting a 9.4% deficit for 2027. Fiscal rules have proven easier to modify than deficits. The 2003 to 2013 supercycle was consumed rather than invested, with total factor productivity contributing negatively. Brazil's October election, Argentina's 2027 cycle, El Niño and the USMCA review are the near-term swing factors.
To be clear, Citi's bull case does not rest on current growth. It rests on valuation (Ibovespa at 8.8x forward earnings), currency levels, carry and a region that represents 13% of EM GDP but less than 7% of the MSCI EM index. The "Hummingbirds" of Panama, the Dominican Republic and Costa Rica, converging without commodities, show what reform-led growth looks like.
Five Takeaways for Advisors and Investors
- The dollar is the thesis. A sustained weak-USD regime is the single most important precondition; if it reverses, so does the case.
- Carry is the near-term reward. Brazil, Colombia and Mexico real rates remain among the highest globally, with room to cut.
- Country selection beats regional beta. Chile, Peru and Argentina screen strongest on fundamentals; Brazil is the high-beta expression; Mexico is a USMCA trade.
- Fiscal execution, not diagnosis, is the risk. Watch primary balances and congressional capacity, not headlines.
- Local wealth is still hedging. When 70% of regional family office capital sits offshore, external investors should size positions with the same humility.
Footnote:
1 Citi Research. "LatAm Poised for Take-Off: The Macro Cycle Turns Latin America's Way." Must C, Citigroup Global Markets Inc., 10 Sept. 2026, https://ir.citi.com/d-5vuJiD7Hf-CjTIizbzlF5UZLnoLYiNDtkJOFLKTY5LJi33HczLOEECds-yzdoP_vrAXLKFFra-g3SWYmkGRBExYlRjPNlj3AXff-z9kVA%3D. Accessed 15 Sept. 2026.
