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%.
Globally, the IMF said the economy is set for a yearly 3.2% output growth, with U.S. strength offsetting headwinds from lingering high inflation, weak demand in China and Europe, and spillovers from two regional wars.
Last week, the World Bank downgraded its 2024 economic growth forecast for Latin America and the Caribbean to 1.6%.
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