The gross domestic product (GDP) of Latin America and the Caribbean will grow just 1.9% this year, estimated the International Monetary Fund (IMF) in its latest economic outlook update, which is 0.4 percentage points lower than the October estimate.
He IMFwhich presented its “World Economic Outlook Update” this Tuesday, projects that the region’s economic growth will decrease from an estimated 2.5% in 2023 to 1.9% this year, and that it will increase to 2.5% in 2025, which corresponds to a downward revision for 2024 of 0.4 percentage points compared to the projection in last October’s WEO report.
“The revision of the forecasts for 2024 reflects negative growth in Argentina in the context of a major policy adjustment to restore macroeconomic stability,” said the IMF which, however, expects a slightly greater expansion than three months ago in both Brazil like in Mexicothe largest economies in Latin America.
For Argentinathe international organization drastically reduced its forecast for economic activity from 2.8% growth to a 2.8% contraction, which weighed on its outlook for the region as a whole.
While in the case of Brazil there are improvements of 0.2 percentage points and 0.6 percentage points for Mexico, mainly due to the knock-on effects of a domestic demand stronger than expected and greater than expected growth in the main trading partners.
Updating the economic outlook for the IMF does not contain any mention of Uruguay. However, in the October edition the organization stipulated GDP growth for 2023 at 1% as a consequence of the historic drought, while for this year the indicator is 3.2%.
He IMF expects, meanwhile, that the growth of emerging markets and developing economies will stand at 4.1% in 2024, compared to the 4.0% forecast at the end of last year.
What does the IMF expect for the world economy?
The projections of International Monetary Fund They place global growth at 3.1% for this year and at 3.2% in 2025, which represents an improvement of 0.2 percentage points compared to the forecasts in last October’s edition of the world economic outlook.
Among the reasons, the organization mentioned the greater than expected resilience in USA and in several emerging market and developing economies, as well as the fiscal stimulus recently announced in China.
In any case, the forecasts for 2024-25 are lower than the historical average of 3.8% registered in the 2000-19 period, given “the high interest rates of monetary policy to combat the inflationthe withdrawal of fiscal support in an environment of strong indebtedness that slows down economic activity and low underlying productivity growth.