Latin America’s recovery runs out of steam, says IMF

The International Monetary Fund (IMF) warns that the economic recovery in Latin America is running out of steam and inflation remains high, which, according to the Fund, is evidence that reforms are needed to support the regional framework.

The assessment is in a text published last Monday (31) on the entity’s blog, and has the former president of the Brazilian Central Bank (BC) Ilan Goldfajn as one of its signatories. “Governments will need to combine the fight against inflation with structural policies that restart growth,” the analysis pointed out.

Since January, Goldfajn has been director of the IMF’s Western Hemisphere Department. He signs the text with Anna Ivanova, deputy head of the regional studies division of the same department, and Jorge Roldos, assistant director of the same department.

Growth

The Fund projects that Latin America and the Caribbean will grow 2.4% this year (in October, it projected an increase of 3.1%) and 2.6% in 2023. For Brazil alone, the projections are for an increase of 0, 3% and 1.6%, respectively.

The year-over-year slowdown was inevitable in 2022, with economies returning to pre-pandemic levels, the IMF said.

“But the downgrade reflects other challenges, including slower growth in China and the US, continued supply problems, tighter monetary and financial conditions and the emergence of the Ômicron variant,” he said.

The trio also highlighted rising inflation last year. “In some of the biggest economies in the region (Brazil, Chile, Colombia, Mexico and Peru), prices rose 8.3% in 2021 – the biggest jump in 15 years and bigger than in other emerging markets,” the IMF said in a statement. your analysis.