Central America – IMF Blog

Navigating Through Global Cross Currents: Latest Outlook for Latin America and the Caribbean

Versions in Português (Portuguese), and Español (Spanish)

The global landscape has changed since our last update in October 2016. These changes have been mainly shaped by:

An anticipated shift in the U.S. policy mix, higher growth and inflation, and a stronger dollar. In the United States—while potential policy changes remain uncertain—fiscal policy is likely to become expansionary, while monetary policy is expected to tighten faster than previously expected because of stronger demand and inflation pressures. As a result, growth is projected to rise to 2.3 percent in 2017 and 2.5 percent in 2018—a cumulative increase in GDP of ½ percentage point relative to the October forecast. The expected change in the policy mix and growth has led to an increase in global long-term interest rates, a stronger dollar in real effective terms, and a moderation of capital flows to Latin America.

Improved outlook for other advanced economies and China for 2017–18, reflecting somewhat stronger activity in the second half of 2016 as well as projected policy stimulus.
Some recovery in commodity prices, especially metal and oil prices, on the back of strong infrastructure and real estate investment in China, expectations of fiscal easing in the United States, and agreement among major petroleum producers to cut supply.

By IMFBlog| January 23rd, 2017|Economic outlook, growth, IMF, International Monetary Fund, structural reforms|0 Comments

In Transition: The Outlook for Latin America and the Caribbean

Event only By Alejandro Werner

Versions in: Português (Portuguese), Español (Spanish)

Following a rough start at the beginning of the year, both external and domestic conditions in Latin America and the Caribbean have improved. But the outlook for the region is still uncertain.

Commodity prices have recovered since their February 2016 trough, but they are still expected to remain low for the foreseeable future. This has been accompanied by a brake—or even a reversal—in the large exchange rate depreciations in some of the largest economies in the region.

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By IMFBlog| July 20th, 2016|Caribbean, Economic outlook, Emerging Markets, IMF, International Monetary Fund, Investment, Latin America, South America, Transition, Uncategorized|0 Comments

Northern Spring, Southern Chills: Outlook for Latin America and the Caribbean

By Alejandro Werner

(Version in Español and Português)

Economic activity in Latin America and the Caribbean has been cooling down for several years, and the temperature in many places is still falling. Regional growth is now expected to dip below 1 percent in 2015—down from 1.3 percent in 2014. Apart from a short-lived recession during the global financial crisis, this would be the slowest rate of growth since 2002.

However, growth dynamics vary across the region, broadly along North-South lines. While spring may be in the air for Mexico, Central America, and parts of the Caribbean, the economic climate remains decidedly chilly in much of South America. What is behind these divergent prospects, and how can a sunnier outlook be restored to the entire region?

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By IMFBlog| April 17th, 2015|Economic outlook, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Reform, Uncategorized|0 Comments

(Yet) Another Year of Subpar Growth: Latin America and the Caribbean in 2015

By Alejandro Werner

(version in Español and Português)

The turn of the year usually brings a fresh dose of optimism. Yet, worries dominate across much of Latin America and the Caribbean today, as 2015 marks yet another year of reduced growth expectations. Regional growth is projected at just 1¼ percent, about the same low rate as in 2014 and almost 1 percentage point below our previous forecast. Challenging external conditions are an important drag for many countries. Still, it’s not too late for some good New Year’s resolutions to address domestic weaknesses and improve growth prospects.

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By IMFBlog| January 21st, 2015|Advanced Economies, Economic outlook, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, growth, International Monetary Fund, Reform, Uncategorized|0 Comments

Three Key Questions About the Slowdown in Emerging Markets

By Sweta Saxena

1. Are emerging markets slowing down? Yes. They have been slowing down for some time now. GDP growth has declined from 7 percent during the pre-crisis period (2003-8) to 6 percent over the post-crisis period (2010-13) to 5 percent, in our projections, over the next 5 years (2014-18). This path is illustrated below in Chart 1. This last point stands out. Despite an uneven recovery, growth in advanced economies is projected to eventually recover. Not so for emerging markets.

Chart 1

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By IMFBlog| September 18th, 2014|Advanced Economies, Asia, Economic research, Emerging Markets, Finance, Globalization, growth, IMF, International Monetary Fund, Latin America, Uncategorized|0 Comments

Reduced Speed, Rising Challenges: IMF Outlook for Latin America and the Caribbean

By Alejandro Werner

(Version in Español and Português)

The prospects for global growth have brightened in recent months, led by a stronger recovery in the advanced economies. Yet in Latin America and the Caribbean, growth will probably continue to slow, although some countries will do better than others. We analyze the challenges facing the region in our latest Regional Economic Outlook and discuss how policymakers can best deal with them.

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By IMFBlog| April 25th, 2014|Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Financial Crisis, growth, IMF, International Monetary Fund, Public debt, Uncategorized|0 Comments

The Outlook for Latin America and the Caribbean in 2014

By Alejandro Werner

(Version in Español, Português)

Looking to the year ahead, how do we see the global economic landscape, and what will this mean for our region? This question is especially on people’s minds today, given the risks of deflation in advanced economies and of sustained turbulence in emerging markets.

Despite these risks, we expect that the region will grow a little faster than last year—increasing from 2.6 percent in 2013 to 3 percent in 2014. Stronger global demand is one part of the story, but not the whole story; volatility is likely to be a significant feature of the landscape ahead. And regional growth rates will still be in low gear compared to historical trends, and downside risks to growth remain. So, let’s start with the global scene.

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By IMFBlog| January 30th, 2014|Economic outlook, Economic research, Emerging Markets, Employment, Financial Crisis, growth, IMF, International Monetary Fund, Uncategorized|0 Comments

Building on Latin America’s Success

Next week, I will travel to Chile and Colombia—my second visit to the region since November 2011. I return with increased optimism, as much of Latin America continues its impressive transformation that started a decade ago.

By IMFBlog| December 6th, 2012|Economic Crisis, Emerging Markets, Español, Fiscal policy, growth, IMF, Inequality, International Monetary Fund, Latin America, Public debt|5 Comments

Latin America and the Caribbean: Dealing with Another Food Price Shock

World food prices are on the rise again owing mainly to global weather-related shocks. This has led to concern that the rise could result in higher inflation and hurt the most vulnerable. The impact on domestic inflation in Latin America and the Caribbean of the latest food price shock is beginning to be felt, although the pass-through to core (or underlying) inflation has been relatively limited thus far.

By IMFBlog| October 25th, 2012|Africa, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Fiscal policy, Globalization, growth, IMF, Inequality, Investment, Latin America, Politics|2 Comments

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