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IMF forecasts Latam and Caribbean economy will contract 0.6% this year and expand 1.6% in 2017

Thursday, October 6th 2016 - 12:06 UTC
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The report projects further deterioration in petroleum-rich Venezuela, where GDP declined 6.2% last year and is on course to fall another 10% in 2016 The report projects further deterioration in petroleum-rich Venezuela, where GDP declined 6.2% last year and is on course to fall another 10% in 2016
Falling oil prices are also a factor in the economic woes of Ecuador, the IMF said, forecasting GDP declines of 2.3% this year and 2.7% in 2017. Falling oil prices are also a factor in the economic woes of Ecuador, the IMF said, forecasting GDP declines of 2.3% this year and 2.7% in 2017.

International Monetary Fund said that the economy of Latin America and the Caribbean will shrink 0.6% this year, compared with its earlier projection of a 0.5% contraction. The prediction is part of the latest edition of the IMF's World Economic Outlook, which points out that while major regional economies such as Brazil and Venezuela are suffering, most other countries in the area continue to expand.

 IMF economists also expect the region as a whole to enjoy growth of 1.6% in 2017.

“Confidence appears to have bottomed out in Brazil, and growth is forecast at -3.3% for 2016 and 0.5% in 2017, on the assumption of declining political and policy uncertainty and the waning effects of past economic shocks,” the IMF said.

The report projects further deterioration in petroleum-rich Venezuela, where gross domestic product declined 6.2% last year and is on course to fall another 10% in 2016 “as the decline in oil prices since mid-2014 has exacerbated domestic macroeconomic imbalances and balance of payments pressures.”

Venezuela's jobless rate will top 20% in 2017, the Fund said.

Falling oil prices are also a factor in the economic woes of Ecuador, the IMF said, forecasting GDP declines of 2.3% this year and 2.7% in 2017.

Colombia and Chile are experiencing a slowdown this year, but remain in positive territory, with gains of 2.2% and 1.7%, respectively. Within the region, only Peru and Paraguay - each expanding at a 3.5% clip - are doing better this year compared with 2015.

Latin America's No. 2 economy after Brazil, Mexico, will end the year with growth of 2.1%, down from 2.5% in 2015, the IMF said, though adding that Mexico will resume an upward trajectory.

Categories: Economy, Politics, Latin America.
Tags: FMI.

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  • ChrisR

    Meanwhile inflation will be 10% across the board, it's alter near to it in Uruguay but there is talk that the government figures are being 'massaged'.

    Perhaps Fathead will believe them, as he has never been here he should be the 'usual expert'.

    Oct 06th, 2016 - 05:45 pm 0
  • Marti Llazo

    Pretty much this whole region is hosed at the moment, and although Reekie would like to blame Macri for all of it, the fact remains that it's a regional recession and not just an argie problem.

    Even Chile's usually laudably disciplined economic policies aren't containing the effects of this regional recession. For the first time for as long as I can remember, Chile has lost its laurels as a net creditor nation and it's taking on new debt like a drunken argentine, hoping for that magical turnaround soon. Deficit spending in Chile is not unlike what is happening in Argentina, except Argentina started its deficit back in 2012 under the CFK regime. Chile is already at a fiscal deficit of more than 3 percent of its GNP, with a worsening trend expected for 2017. Argentina's deficit spending is somewhere around 5 percent now. Its next default is only a matter of a short while unless the peronchos are soon brought under control.

    Oct 07th, 2016 - 05:23 am 0
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