IMF’s global economic forecasts: Where does Latin America stand?

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WASHINGTON DC – The International Monetary Fund (IMF) has just presented the latest issue of the World Economic Outlook (WEO) report, which predicts a slowdown in the world economy.

According to the document, released on Tuesday in Washington, expectations for Latin America and the Caribbean are also lower than previously expected, for both 2019 and 2020.

Growth forecasts for the Latin American region are 1.4% in 2019 and 2.4% in 2020 – which represents 0.6 and 0.1 points lower, respectively, than the estimates updated in January. According to the organization, in 2018 the Latin American economy grew by only 1%.

WEO describes that some situations also contributed to the contraction of economies and weakened their expansion.

The report explained that escalating trade tensions between the US and China, macroeconomic tensions in Argentina and Turkey, disruptions in the auto industry in Germany, tightening credit policies in China and worsening political uncertainty in many economies have contributed to a weakening of global expansion.

Despite the economic slowdown, the IMF is optimistic about some Latin American countries. This is due to the “moderate” performance of Brazil and Mexico, but mainly due to the stabilization and financial recovery that awaits Argentina and the above-average growth forecast for Bolivia.

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Although the agency has improved Brazil’s outlook, this year it reduced its projections, mainly due to the fiscal imbalance. The forecast is for growth of 2.1% for this year (a decrease of 0.4 percentage points from the estimate made in January) and 2.5% for 2020 (increase of 0.3 percentage points).

For Mexico, growth prospects narrowed in 2019, with growth expected to be 2.1% in January, now standing at 1.6%. For the next year, the organization predicts the same downward trend from 2.2 to 1.9%.

Inflation will rise to 43.7% for Argentina this year – one of the main problems in the country, while in 2020 it will be 23.2%. The country’s economy will contract 1.2 percent in 2019 and expand to 2.2 percent next year, according to the report.

Venezuela is expecting an economic outlook higher than expected compared to the previous ones, with a contraction of 25% in 2019 and 10% more in 2020. According to the financial organization, the Venezuelan country is in the midst of a “humanitarian crisis” and it is this situation that is considered a considerable burden for the rest of the region’s economies.

As for Bolivia, the outlook is above the regional average, projected to grow 4% this year and 3.9% in 2020.

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