MercoPress. South Atlantic News Agency

IMF forecast depressing

IMF forecast depressing

The deterioration of the US economy, the Argentine crisis and the Brazilian energy shortage have forced the International Monetary Fund to drastically reduce growth estimates for Latinamerica and particularly Mercosur.

IMF's World Economic Prospects indicate that Latinamerica's GDP this year will increase 1,7%, two points below the forecast of six months ago. However IMF is optimistic about the future and believes the region's economy next year will recover and reach an encouraging 3,6%.

IMF Chief economist Kenneth Rogoff admitted terrorist attacks in the US will have an impact in Latinamerican emerging markets, however "it's premature to assess the full effect".

The report indicates Argentina will continue in recession with a 1,4% negative growth, but should manage a 2,6% recovery in 2002.Current account deficit will drop to 2,8% GDP this year and to 2,6% GDP next year. Retail prices will experience a 0,6% deflation in 2001, and 0,6% increase next year.

Brazil is expected to grow just 2,2%, well below last year's 4,5%, but in 2002 should recover and reach 3,5%. Current account deficit this year is estimated in 5% of GDP, and 4,5% GDP in 2002. Inflation should be below 6,5% and 4,8% in 2002.

Uruguay should manage between 0 and 1% growth this year and 2,5% in 2002, with a 5,4% inflation in 2001 and 9,5% next year.

Overall Mercosur will grow 1,4% this year, and 3,2% in 2002; inflation 4,5% and 3,9%, while current account deficit is estimated in 4,2% GDP in 2001 and 3,8% GDP in 2002.

Mexico, the region's second economy behind Brazil and highly dependent from the United States should grow 0,8% this year and 4% in 2002.