He IMF predicts that the economic expansion in Latin America “moderate” this year to 2.1% and warns that the lack of reforms can trigger a “vicious cycle of low growthsocial unrest and populist policies”.
Latin America “faces a trajectory of growth disappointing” and we must “focus on how to improve,” said the director of the International Monetary Fund, Kristalina Georgieva, this Thursday.
But it is not a monolithic region. “He Caribbean and Central America are better than the world average,” he added.
In your annual report for the region released this Friday during the assemblies of the IMF and the World Bank in Washington, the international financial organization foresees a growth economic of 2.1% in 2024, and 2.5% in 2025.
By country, the fund forecasts an expansion for Brazil of 3%, Mexico 1.5%, Bolivia 1.6%, Colombia 1.6%, Ecuador 0.3%, Chile 2.5%, Paraguay 3.8%, Peru 3%, Uruguay 3.2%, Venezuela 3%, Coast Rica 4%, El Salvador 3%, Guatemala 3.5%, Honduras 3.6%, Nicaragua 4%, Panama 2.5% and Dominican Republic 5.1%.
The economy of Argentinawhich must pay a loan of 44 billion dollars with the Fund, it will contract 3.5%.
The countries of Caribbean dependent on tourism 2.8% will progress and non-dependents 16.5%.
Inflation
The inflation has fallen considerably and is close to aim.
Forecasts vary between countries: Mexico 4.5%, Bolivia 6%, Brazil 4.3%, Chile 4.5%, Colombia 5.7%, Ecuador 2.8%, Paraguay 4%, Peru 2.4%, Uruguay 5.4%, Costa Rica 0.9%, El Salvador 2% , Guatemala 4%, Honduras 4.7%, Nicaragua 4.8%, Panama 1.3% and Dominican Republic 3.7%.
The inflation will end the year skyrocketing in two countries: Venezuela, with a 60% rise in prices, and Argentinawith 140%, and then fall to 45% in 2025.
During the first half of 2024, Argentine authorities have achieved the first fiscal surplus In 16 years, they have rebuilt reserves and reduced the inflation faster than expected, recalls the Fund.
“Signs of economic stabilization are emerging” in Argentina but “the pace of recovery remains uncertain and unequal between sectors,” he adds.
Despite the geopolitical tensions global trade flows of the region have not changed.
USA remains the main destination of exportwith an approximately stable share of around half of all goods exported from BrazilChile, Colombia, Paraguay, Peru and Uruguay. The volume is 80% in the case of Mexico.
Meanwhile, the commercial relationship with China has gone from 10% of total exchanges before 2017 to around 15% in recent years.
“Rebuild mattresses”
At the regional level the IMF recommends “moving forward without delay” with the fiscal consolidation to “rebuild (reserve) buffers while protecting the investment priority public and social spending”.
In the medium term the growth regional will remain at “its low historical average” due to unresolved issues, such as the low investment and productivity, and demographic changes.
He IMF He is worried. “The agenda of reforms ongoing is scarce and could lead to a vicious cycle of low growthsocial discontent and populist policies,” he warns.
To prevent this, he proposes promoting all the engines of growthwhich means improving the managementwith more effective governments that combat crime, increase international trade and investment public, without forgetting “policies to address climate change”.
