The International Monetary Fund (IMF) forecasts that Latin American countries will close 2022 with a deficit an average of 4.7% with respect to the Gross Domestic Product (GDP).
In his report on “tax surveillancepublished today, the financial body also anticipates that the deficit average in the region is reduced to 42. % of GDP in 2023 and 3.4 % in 2024.
Within the region, the Fund forecasts large variations for 2022, ranging from 7.6% forecast for Brazil to 1.5% for Chile, passing through 3.2% for Mexico; 3.8% for Argentina; 2.4% for Peru; 4.6% for Colombia; 2.7% for the Dominican Republic and 2.5% for Uruguay.
“Projections for most Latin American countries point to deficit much lower than in 2020 due to the end of the exceptional fiscal measures decreed by the pandemic and the return of economic growth and therefore of tax revenue,” Paolo Mauro, deputy director of the Department of Financial Affairs of the IMF.
Regarding the weight of the public debt with respect to GDP, the IMF it projects that this will average 71.7% in the region in 2022, and will remain stable around this figure for the next five years.
Regarding the two largest economies in the region, the Fund forecasts a debt/GDP ratio of 91.9% for Brazil this year and 58.4% for Mexico.
According to Mauro, the high unexpected inflation experienced in Latin America helped reduce the debt/GDP ratio in the short term in countries that are financed in their own currency, but the economist recalled that it is not a feasible way to maintain accounts in order in the long run.
Outside the Latin American region, the IMF projects that the United States will end 2022 with a deficit 4.8% public; the euro zone, 4.3%; the United Kingdom, 4.3%; China, 7.7%; Japan, 7.8%; and India, 9.9%.
