IMF estimates 2.5 % growth for Latin America in 2022
The IMF improved its growth estimates for the Latin American and Caribbean region by 2.5 % by the end of 2022 in an environment of great uncertainty
The International Monetary Fund (IMF) published its new estimates on economic growth and slightly modified its forecasts for the Latin American and Caribbean region by 2.5 % for this 20220 in the framework of an environment marked by uncertainty due to the war between Russia and Ukraine.
According to the organization, the tensions in the international environment, as a result of the war, cause the estimates to be quite “uncertain”. However, the entity forecasts that the “general growth of the region will moderate to 2.5 % during 2022–23, a figure that represents an improvement of 0.1 percentage points” compared to forecasts made in January.
The IMF is emphatic in pointing out that international tensions make forecasts “even more uncertain than usual.” For the largest economy in the region, Brazil, the financial entity estimated a “growth of 0.8 % in 2022 (+0.5 points compared to January forecasts) and 1.4 % in 2023 (-0.2 points), while Mexico, the second regional economy, would grow 2 % this year (-0.8 points) and 2.5 % next year (-0.2 points).”
Impact of the European economy in the region
According to the IMF, and despite the fact that the Latin American and Caribbean region has fewer direct links with Europe, compared to other regions, the inflationary process that is impacting the old continent, as well as its measures to tighten monetary policies, will disturb the economies of Latin America. Latin.
The agency’s report describes that before Russia’s invasion of Ukraine, inflation had already increased in several of the economies of the Latin American region as a result of the increase in the cost of raw materials and the “imbalances of supply and demand induced by the pandemic”, which caused that different central banks in the region “were already under pressure before the war.”
Additionally, it highlights that the insufficiency in the supplies of products that every war generates will increase these pressures “in particular through increases in the price of energy, metals, fuels and food” could significantly increase the risk of social unrest,” says the report.
M. Rodríguez
Source: eluniversal.com
