In 2025is projected for Latin America and the Caribbean a growth of 2.5%of which Mexico moves awaywith a difference of 1.2 percentage points.
“In Mexico, growth is projected to be 1.5% in 2024, reflecting weakening domestic demand as a result of tightening monetary policy, before slowing further to 1.3% in 2025 due to a more restrictive fiscal stance. “explains the IMF.
Mexico is one of the emerging and developing economies that are placing caution on the IMF’s global growth estimate.
What does the IMF see for the world economy?
The world economy will grow 3.2% this year and next, predicted the IMF, which opts for caution in its forecasts due to the slowdown in emerging countries such as China, Mexico or Russia.
On the occasion of the publication of its annual report on the world economy (WEO), the IMF expressed its concern about the increase in global uncertainty, due to the multiplication of both geopolitical and economic risks, in particularly the economic sluggishness recorded in China.
“The risks are intensifying,” for example geopolitical tensions, which could push up energy prices, warned the IMF’s chief economist, Pierre-Olivier Gourinchas, in an interview with AFP.
Gourinchas, in a subsequent press conference, insisted on the “risks of escalation of regional conflicts, particularly in the Middle East, which could weigh heavily on energy markets.”
As a result, growth forecasts remain weak globally. Some countries are in better economic health than others.
The United States should end the year with 2.8% growth, estimates the IMF, which predicts 2.2% expansion of the world’s largest economy in 2025.
“We are close” to a soft landing for the US economy, Gourinchas estimated. “Consumption is going very well and at the same time inflation continues to slow down.”
By “soft landing” we mean controlling inflation without recession.
Inflation
Not everything is negative: inflation drops to its target of 2% in the main economies, a success due, according to the IMF, to the central banks.
“We are always slightly above, but we are getting closer and the gap should close in 2025,” Gourinchas said.
“At the same time, growth has resisted and will continue to resist, so a soft landing is in sight and is a major achievement,” he added.
In most Latin American countries, inflation has declined but some have seen upward revisions since April due to a combination of factors.
IMF cites “solid wage growth preventing faster disinflation in the services sector” in Brazil and Mexicometeorological phenomena in Colombia and “rises in regulated electricity rates” in Chile.
With information from AFP
