Send by email

your name: email to: message:
Username: Email: Password: Confirm Password:
Login with
Confirming registration ...

Edit your profile:

Country: Town: State:
Gender: Birthday:
Email: Web:
How do you describe yourself:
Password: New password: Repite password:

Wednesday, April 18, 2018

The International Monetary Fund reports on Latin America

Por MRod

Despite the improvement in prospects, the performance of the Latin American economies is still halfway to the global average, which is projected to be around 3.9% this year and next. For the group of emerging and developing countries, the IMF maintains the growth rate at 4.9% for 2018 and will rise to 5.1% in 2019, for the long term to stabilize at 5%.

The recovery in Latin America is reinforced. The International Monetary Fund (IMF) projects an expansion of 2% for the region this year, seven tenths more than in 2017 and one more than projected three and six months ago. From there it will accelerate to 2.8% next year, in this case two tenths above the prediction made in January and four above that of October.

However, according to the Fund, the elections, the aging of the population and the stagnation of productivity are risk factors. The gradual rebound in Latin America is explained by several factors. On the one hand, it helps that better than expected progress is being registered in the countries of the euro zone, as well as the United States, China and Japan.

The boost also comes from the rise in raw materials, as well as the increase in investment and especially the acceleration of global trade. However, it must be highlighted that much of the recovery is due to own merits. Brazil, the largest economy, begins to see the recession through the rearview mirror. The IMF projects growth of 2.3% this year and 2.5% the next.

Not only does it represent a significant improvement compared to the 1% in 2017, after the contractions recorded in 2015 and 2016. The new estimate represents an upward revision of four tenths compared to January.

What about the rest? Mexico, the second most important, will grow from 2% in 2017 to 2.3% in 2018 and will rebound to 3% in 2019. The application of the agenda of structural reforms is the main sustenance to growth. Argentina, however, will experience a moderation in lowering its growth to 2%, almost one point below that of 2017. It is explained, according to the technicians, to the effects of the drought in agricultural production. It also cites the fiscal and monetary adjustment to combat inflation and guarantee the sustainability of public finances.

After this adjustment, it will resume 3.3% in the medium term. As for Colombia, one of the largest exporters of raw materials, growth will be 2.7% this year and 3.3% in 2019. Chile's economy will expand at a rate of around 3.3% during the next two years. That of Peru will do so by 3.7% in 2018 and from there it will rise to 4% in 2019. The highest growth rate is that of Paraguay, of 4.5% and 4.1% respectively.

Venezuela is the clear black point. As the IMF indicates, it has been dragging an economic and humanitarian crisis since 2014. The contraction will be 15% this year, with a 6% again in 2019. But this moderation is not because the problems dissipate. On the contrary, the adverse conditions are intensified, and the organism anticipates that inflation will shoot up 13.865% this year and the next one will exceed 12.800%. Unemployment will be 33%, compared to 27% in 2017.