Given the improved performance of Latin America's largest economies, particularly Brazil, Mexico, Colombia and Chile, the IMF has raised the 2022 growth projection for the Latam and the Caribbean.
In its World Economic Outlook report, the IMF said it predicts the region’s GDP to expand 3% this year compared with the 2.5% forecast it had issued in April. However for 2023, the multilateral lender lowered its growth projection to 2% from 3% previously.
Brazil's GDP is expected to rise by 2% rather than 1.5% anticipated previously, and the economy ministry maintained its 2023 GDP growth outlook at 2.5%, the country's Economic Policy Secretary Pedro Calhman stated.
This is because of an improvement in the job market, an increase in private investments and strong foreign trade. We don't see any reason to readjust our projection, we are quite convinced of it, said Calhman.
For this year, the IMF estimates are now more in line with what economists were already expecting for the region’s economy. However, the concern now lies with the regional performance in 2023, as a stronger downturn is expected in the US and European countries and this could have important effects in the region, Alex Agostini, chief economist at Brazilian ratings agency Austin Rating said.
The potentially good news about next year is that China's economy may grow more than this year and it is an important element for Latin American commodities, Agostini added.
IMF sees the Brazilian economy expanding 1.7% and 1.1% in 2022 and 2023, respectively, compared to the prior forecasts of 0.8% and 1.4%. For the region’s second largest economy, Mexico, the predictions are now 2.4% and 1.2% in the same comparison, versus 2% and 2.5% in April. Chile's forecast indicates the economy this year will expand 1,8% compared to the previous 1,5%
Citing the effects of inflationary pressures and interest rate hikes, the IMF lowered its GDP estimates for the global economy to 3.2% this year and 2.9% in 2023, versus the previous prediction of 3.6% for both years.