Leading multilateral development banks announced Wednesday they will increase their support to Latin America and the Caribbean by providing as much as 90 billion US dollars during the next two years in a joint effort to spur economic growth in the region by coordinating their crisis response initiatives.
The World Bank believes that the IMF growth prospects for Latinamerica are “too pessimistic” and anticipates the region will suffer a milder contraction 0.6%, compared to the 1.5% forecasted by the April World Economic Outlook which IMF released Wednesday.
Japan has reported its first annual trade deficit in 28 years, with exports in the year to March down 16% from the previous year. Total exports in February and March were half of what they had been a year earlier, the finance ministry said.
The International Monetary Fund World Economic Outlook estimates that the Uruguayan economy will expand 1.3% this year and 2% in 2010, following an almost record breaking 8.9% in the fourth quarter of 2008.
Argentina’s economy is forecasted to contract 1.5% in 2009 and will resume growth in 2010 but at a very modest 0.7%, according to the International Monetary Fund’s April World Economic Outlook (WEO).
The International Monetary Fund (IMF) has warned credit crunch losses could reach 4 trillion US dollars, damaging the financial system for years to come. It further warns that even if urgent action is taken to clean up the banking system, the process will be slow and painful, delaying economic recovery. Banks may need 1.7 trillion in additional capital, the IMF forecasts.
The UK has experienced its first period of deflation in almost 50 years. Data from the Office for National Statistics (ONS) showed the Retail Prices Index (RPI) measure of inflation fell to minus 0.4% last month, down from 0% in February, the first negative reading since March 1960.
Brazil is expected to push very hard to have more say in the International Monetary Fund, reflecting the importance of emerging countries. To support that greater influence Brazil has pledged to advance up to 4.5 billion US dollars to the multilateral organization.
Colombia became the third country to seek access to a new IMF credit line for strong performing countries, requesting 10.4 billion US dollars to bolster its economy in the face of the global recession.
Uruguay’s Economy minister Alvaro García downgraded the country’s growth prospects for this year while doubling the budget deficit estimate from 1% to 2% of GDP. He made the announcements following Monday’s cabinet meeting when he admitted the Uruguayan economy will expand 2% in 2009, --down from 3%-- with a first negative quarter.