Latin American GDP will rise, but so will inflation, according to the IMF

Latin American GDP will rise, but so will inflation, according to the IMF

The International Monetary Fund (IMF) raised by one tenth, to 2.5%, its growth forecasts for the GDP for Latin America and the Caribbean in 2022, At the same time, he warned of the strong inflationary pressures that the region will suffer, derived in part from the war being waged in Ukraine.

(See: IMF lowered world economic growth by almost a percentage point).

In his latest report on the World Economic Outlook, which serves as an update to its forecasts from the beginning of the year, the Fund raises its forecast for inflation for this area to 11.2% in 2022, compared to 9.8% in 2021, although for 2023 it gives a break and forecasts that prices will moderate slightly and rise by 8%.

The report, released in the framework of the annual assembly of the IMF and the World Bank, also lowers the growth forecast for the gross domestic product (GDP) of Latin America and the Caribbean for 2023 one tenth, up to 2.5% (the same rate that he ventures for 2022), very far in both cases from the 6.8% that the economy of the area grew in 2021.

(See: The next threat that would put the world in check, according to Bill Gates).

As for the two main regional economies, the report states that Mexico will grow 2% this year and 2.5% in 2023 (eight tenths and two tenths less, respectively, compared to its previous forecasts), while for Brazil forecasts growth of 0.8% in 2022 and 1.4% in 2023 (five tenths more and two tenths less).

In March, the director of the Fund, Kristalina Georgiev, anticipated that the conflict in Ukraine could represent an economic opportunity for some countries in the region food exporters before the fall of Russian and Ukrainian competition.

(See: Colombia, among the countries most affected by the rise in food, according to the IMF).

Despite these opportunities, the managing director of the IMF also warned of risks such as the rise in energy prices or the shortage of fertilizers, of which Russia and Belarus are major exporters, while Brazil is one of the largest importers.

Likewise, he warned that the Russian invasion of Ukraine was going to worsen the inflationary situation in Latin America due to the pressure it is generating on the price of energy, in addition to implying risks for the supply of the region.

(See: World economy will slow down due to war in Ukraine and inflation).

In this regard, Georgieva recalled that inflation in many Latin American countries was already skyrocketing before the war in ukraine for its difficulties in recovering from the recession caused by the covid-19.

EFE

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