By Isaac Cohen*
The International Monetary Fund, at its annual meetings held last week in Bali, Indonesia, released the Regional Economic Outlook for Latin America and the Caribbean, describing the region’s economic performance as losing momentum and becoming more uneven.
https://www.imf.org/en/Publications/REO/WH/Issues/2018/10/11/wreo1018?cid=em-COM-123-37832
The major Latin American economies are pulling down the regional growth average, with Argentina entering into recession, while tight financial conditions prevail in Brazil and Mexico, amid less favorable external circumstances. Also, “there is still no end in sight to the economic and humanitarian crisis in Venezuela.” Therefore growth projections for the region “have been revised downward,” to 1.2 percent this year and 2.2 percent in 2019.
Commodity prices have improved, but certain external factors have become more adverse, such as higher interest rates, a stronger dollar and protectionist threats in the United States. Also, the slowdown in the Chinese economy is influencing those South American economies for which China has become their main export market, such as Argentina, Brazil, Chile and Uruguay.
Some Andean economies, such as Bolivia and Peru are projected to grow this year and next at around 4 percent.
Higher oil prices have supported Colombia’s positive performance, but Ecuador’s recovery has cooled off.
The Central American economies are benefitting from stronger growth in the United States, but oil prices and domestic political instability are having adverse effects in some of them. Still, the Dominican Republic and Panama remain the fastest growing economies in the region.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
