WASHINGTON – The IMF said on Monday that Latin America’s economy would grow just 1.2 percent in 2017, a downward revision of four-tenths of a percentage point from the prior estimate.
“The projected recovery is weaker than that forecast in October, given the persistent weakness in some of the principal economies even though they continue to experience moderate growth,” International Monetary Fund (IMF) Western Hemisphere Department director Alejandro Werner said in a press conference.
After two years in recession, Brazil will grow an anemic 0.20 percent in 2017, or three-tenths of a percentage point less than forecast in October, due to the weak recovery in consumer spending, while Mexico will see its economy grow at just 1.7 percent, down from the previous forecast of 2.3 percent, due to the “uncertainty” over US trade policy, Werner said.
The 2017 outlook for Argentina, meanwhile, was revised downward to 2.2 percent due to the slower-than-expected growth in the second half of last year.
Argentina’s “real GDP is projected to rebound this year, as higher real wages boost consumption, stronger external demand supports exports, and public investment accelerates,” the IMF said in its latest report.
Colombia implemented “a more restrictive monetary and fiscal policy that caused a faster-than-expected reduction in the current account deficit,” Werner said.
The Andean nation’s “medium-term growth will be reinforced by the recently signed peace agreement and a structural tax reform, which will create space for key infrastructure and social spending,” the IMF said.
Chile and Peru, according to the IMF’s estimates, will grow faster than the regional average, achieving gross domestic product (GDP) growth of 2.1 percent and 4.3 percent, respectively, thanks to the rebound in commodity prices, especially copper.
Venezuela, however, will continue to experience problems, the international financial organization said.
“Venezuela remains in a deep economic crisis on a path to hyperinflation, led by a large fiscal deficit that has been monetized, extensive economic distortions, and a severe restriction on the availability of imports of intermediate goods. Economic activity is projected to contract sharply in 2017, while inflation is expected to accelerate further,” the IMF said.