IMF warns global trade weakness may affect Latin America
The international financial organization foreseens a “brake” for the growth of Latin America and the Caribbean
Given the deep tensions between the United States and China, the International Monetary Fund has announced its concern about the weakness of world trade and how this can affect Latin America and the Caribbean.
Through a report delivered this Monday by the IMF, it stated: “The current weakness of global growth and trade is affecting exports increase in Latin America and the Caribbean, which is a brake on the projections of the region.”
After the last cut of forecasts made by the international organization last July, two weeks ago the IMF proceeded again to apply another cut in forecasts of the region projecting for this year a growth of 0.2%, after having applied another one before the last July, which means a cut of 0.4 percentage points.
Consequence of the slowdown
In the report, they also calculated the consequences for the region in case of a deceleration of the two great powers. “For instance, a big shock that temporarily reduces growth in both countries by 1 percentage point, combined with a tightening of the financial conditions, growth would decrease between 0.5 and 1 percentage point in the largest economies in the region.”
Assessing the risks for the Latin American region, the IMF indicates a possible contagion in the face of financial turbulence in Argentina, a South American country from which the organization forecasts a deepening crisis combined with a contraction of GDP of 3.1% for this year.
K.Villarroel
Source: bancaynegocios
