IMF predicts a contraction in Latin America’s GDP

Argentina’s economic crisis, which will contract by 2.8% in 2024, has led the International Monetary Fund (IMF) to cut Latin America and the Caribbean’s growth forecast for this year by 0.4 percentage points, to 1.9%.

This is indicated by the IMF’s latest Economic Outlook Report (WEO), which attributes the fall to a “significant policy adjustment” aimed at restoring macroeconomic stability in Argentina.

In October, the IMF had projected Argentina’s growth of 2.8%, but in three months it has changed to a contraction of 2.8%, which is a difference of 5.6 points. By 2025, the IMF expects Argentina to recover and grow by 5%, 1.7 points more than expected in October.

The situation in Argentina affected the region’s average growth. In total, Latin America and the Caribbean will grow by 1.9% this year, 0.4 points less than the October estimate. By 2025, the region will grow by 2.5%, 0.1 points more.

Growth in Latin America Growth in Latin America and the Caribbean is below world growth, which the IMF increased this Tuesday by 0.2 points, to 3.1%.

The deputy director of the Fund’s Research Department, Petya Koeva, explained in an interview that, if Argentina and Venezuela are excluded, the rate of growth this year would be 2.4% and that of next year 2.3%.

In addition, Koeva noted that the two major economies of the region will perform better than expected. Mexico will grow this year by 2.7%, 0.6 points more, and in 2025 by 1.5%, the same as the previous projection.

K. Tovar

Source: BancayNegocios

(Reference image source: Anne Nygård, Unsplash)

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