Growth in the region made up of Latin America and the Caribbean is a priority for the International Monetary Fund. For this reason, it has urged governments to allocate the necessary resources to face current economic, fiscal and social challenges.

On Friday, October 25, the international organization asked representatives of Latin America and the Caribbean to include in their agenda the discussion of reforms that will allow them to boost their economy.

“In its Regional Economic Outlook, the IMF projected that the region’s growth will accelerate from 2.1 percent this year to 2.5 percent in 2025. But the expansion of the so-called AL7 group, which includes Brazil, Chile, Colombia, Mexico, Paraguay, Peru and Uruguay, is projected to slow from 2.4 percent in 2024 to 2.0 percent next year.”

According to Rodrigo Valdés, director of the IMF’s Western Hemisphere Department, “the urgency of deepening reforms for growth really applies to almost all economies in the region.”

According to the IMF’s estimates of medium-term growth for the region (excluding Argentina and Venezuela), it “is projected to be around 2.5 percent annually over the next five years and will likely remain close to its low historical average. This reflects persistent and unresolved challenges, such as low investment, slow productivity growth and demographic changes.”

The IMF stressed in its report that low economic growth is marked by factors such as social discontent, entrenched populist policies, “slowdown in the expansion of the labor force due to falling birth rates and an aging population,” among others.

The absence of fiscal consolidation reforms will cause the region’s debt to continue to grow, according to the IMF, which has asked governments to increase personal income tax collection.

M.Pino

Source: jornada

(Reference image source: Alex Shuper for Unsplash+)

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