WASHINGTON, April 10 (NNN-MERCOPRESS) — The decline in the forecasts of Argentina, Mexico and Brazil, the major economies of the Latin American region, and the deepening of the Venezuelan crisis will halt the development of the region, the International Monetary Fund (IMF) said.
In Argentina, the bonds remain on offer and do not arouse interest in investors, igniting the alarms and rebounding once again the Country Risk and the US Dollar.
Latin America’s economy will advance 1.4% in 2019, six tenths less than the IMF estimate in January, according to its most recent report on global economic prospects.
“The second half of 2018 in Latin America was weak and much of that is affecting in 2019,” stressed the organization’s chief economist, Gita Gopinath, at a press conference, in which she reviewed the reasons that motivated the IMF to lower its forecasts. for Mexico, Brazil and Venezuela.
However, why is growth complicated for the emerging countries of the region? At first, the economist highlights the fact that the political uncertainty surrounding Mexico’s new government, led by Andrés López Obrador, reduces its growth forecast.
The moderation of activity in advanced countries, as well as the effect of more rigid financial conditions, high indebtedness, the cheapening of energy and raw materials, are causing the braking of estimates as well.
Argentina is the incognita of the region. The forecast is for its economy to contract during the first half of 2019 due to a moderation in demand. Although it would grow again in the second semester as the disposable income of the families grows and the agricultural sector recovers from the drought blow the past that it suffered last year.
The IMF forecasts that Venezuela’s GDP will contract by 25%, after falling by 18% last year, in a context marked by hyperinflation – which in 2019 will be around 10,000,000% – and the political and institutional crisis, where two presidents that are considered legitimate by different countries coexist. The international institution has described the situation as a “humanitarian crisis”.
Brazil, according to the IMF, faces the challenge of containing the increase in public debt without the fiscal consolidation process shifting spending on social programs to the most vulnerable.
However, Brazilian domestic demand is being met by a less volatile economy due to growing confidence in the markets; Inflation is also close to the target. It also insists, from the IMF, on the labor reform and the improvement of infrastructures. — NNN-MERCOPRESS
