July 25, 2021

The IMF cuts the growth forecast in Latin America to 1.2% in 2018 and 2.2% in 2019

The IMF cuts the growth forecast in Latin America to 1.2% in 2018 and 2.2% in 2019



The International Monetary Fund (IMF) has today cut forecasts of economic growth in Latin America and the Caribbean to 1.2% for this year and up to 2.2% for 2019, four tenths less than what it calculated in July in both cases.

The IMF attributes mainly the decrease in its forecasts for the region to the situation in Argentina, with an estimated contraction of 2.6% for this year and 1.6% for the next, according to its report "Global Economic Perspectives" presented in Bali (Indonesia).

The Argentine economy, which grew by 2.9% in 2017, will see its progression slow down in 2018 and enter recession due to "stricter" global financial conditions, a scandal of internal corruption and persistent uncertainty about the success of the stabilization plan underlying the program with the IMF, "according to the document.

The IMF and the Argentine Government agreed in June to a plan of financial assistance worth 50,000 million dollars and three years, to which an additional 7,100 million dollars were added, to try to stabilize the economy of the South American country.

Another country that sees its forecasts lowered is Brazil, of which the IMF estimates that it will grow by 1.4% in 2018 and 2.4% in 2019, four tenths and one tenth, respectively, below the July forecasts.

The Fund justifies the downward revision of the country of Rio due to the impact of the truckers' strike in May, which affected practically all sectors of the economy, especially industry and services; and by the external conditions of the financial market.

The organization led by Christine Lagarde also moderates the growth of Mexico scheduled for 2018 and 2019, to 2.2% and 2.5%, respectively, which means a reduction of one and two tenths.

This decrease, according to the IMF, "reflects the impact on investment and domestic demand of the prolonged uncertainty related to trade", in reference to the renegotiation of the North American Free Trade Agreement (NAFTA), which was not sealed until last week.

The figures of the region, also, are weighed down by the deep economic crisis that Venezuela is experiencing, with an estimated contraction of 18% for this year and 5% for 2019.

Despite the predicted reductions for the main economies of the region, Bolivia (4.3%), Chile (4%), Paraguay (4.4%), and Peru (4.1%) will grow at an important rate this 2018.

On the other hand, the IMF forecasts that economic activity in Central America will increase by 2.8% in 2018 and 3.8% in 2019, figures that are revised downwards by five and three tenths, respectively, compared to those released three months ago.

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