"The revisions are largely due to a significant slowdown in growth in Mexico," the International Monetary Fund noted.

An expected contraction in Mexico's economy in 2025 accounts for much of the IMF's estimate of a slowdown in GDP growth in Latin America and the Caribbean this year, the IMF's updated World Economic Outlook showed Tuesday.

The International Monetary Fund now expects economic growth in Latin America and the Caribbean to slow to 2.0% in 2025 from last year's 2.4% expansion, down from a January estimate of 2.5% growth.

"The revisions are largely due to a significant slowdown in growth in Mexico," the IMF noted.

This "reflects weaker-than-expected activity in late 2024 and early 2025, as well as the impact of U.S.-imposed tariffs, associated uncertainty and geopolitical tensions, and tightening financing conditions."

Mexico's economy, closely intertwined with the United States, is now expected to contract 0.3% this year from a previously projected 1.4% expansion, as U.S. tariffs hit exports.

Growth in Brazil, the region's largest economy, is expected to slow to 2.0% from a January estimate of 2.2%.

Argentina's 5.5% growth forecast for 2025 represents an increase from January's 5%. Colombia is projected to grow 2.4%, Chile 2.0%, and Peru 2.8%.

For Central America, the estimate is for growth of 3.8% this year, slightly slower than the 3.9% rate in 2024, while in the Caribbean, the economy is projected to slow to 4.2% in 2025 from 12.1% last year.

The IMF lowered its global economic growth forecast for 2025 from 3.3% to 2.8% in January, following the US increase in tariffs to their highest level in a century. The fund lowered its growth forecast for most countries.