IMF sees smaller slowdown in Latam, Caribbean region this year

Reuters

Published Apr 16, 2024 09:23AM ET

NEW YORK (Reuters) - The International Monetary Fund upgraded its 2024 view for economic output growth in Latin America and the Caribbean to 2.0% from its January estimate of 1.9%, though it still expects a slowdown, the fund said Tuesday in its latest World Economic Outlook.

The 2.0% GDP increase forecast for 2024 across the region compares to 2.3% in 2023, and a 2025 forecast of 2.5%.

The overall slowdown in growth is due in part to smaller rates of growth in the region's largest economies. Yet Brazil's 2.2% growth estimate for this year is 0.5 percentage point higher than the January view.

Mexico's 2.4% estimate is 0.3 percentage point below the estimate from three months ago.

These numbers would be a deceleration from the 2023 growth in output, which was 2.9% for Brazil and 3.2% for Mexico.

"In Brazil, growth is expected to moderate to 2.2% in 2024 on the back of fiscal consolidation, lagged effects of still-tight monetary policy, and a smaller contribution from agriculture," said the IMF.

For Mexico, the fund cited a contraction in manufacturing as key for the forecasted growth deceleration, while increased government spending would be a pillar of this year's expected growth.

Elsewhere in the region, the IMF expects Argentina's contraction to deepen to -2.8% this year from 2023's -1.6%, with annualized consumer inflation seen just under 250%. The fund sees a current account balance in the black at 0.9% of GDP, compared to last year's -3.5%.

Colombia, Chile and Peru are seen growing at faster rates than last year. Colombia's 1.1% GDP growth estimate compares to last year's 0.6%, Chile is seen accelerating to 2.0% from 0.2% and Peru's 2.5% expansion would follow a 0.6% contraction in 2023.

For central America the estimate is for 3.9% output growth, compared to 4.2% last year, while the Caribbean is seen accelerating further to 9.7% in 2024 from last year's 8.3%.