The International Monetary Fund (IMF) on Tuesday raised its forecasts for economic growth in 2022 for Latin America and the Caribbean, but cut its expansion projection in 2023 due to changes in commodity prices and external financing conditions.
According to its projections, the IMF expects growth for this year to be 3.5%, from 3.0% in its July estimate, while its projection of global output expansion in 2022 remained unchanged. at 3.2%.
According to the information released on Tuesday, by 2023, the expansion of production in Latin America and the Caribbean is forecast to reduce by 0.3 percentage points, to 1.7%. Globally, the figure was trimmed 0.2 percentage point to 2.7%.
This year’s regional forecast upgrade is based on “stronger-than-expected activity in the first half of 2022 thanks to favorable commodity prices, still-favorable external financing conditions, and the normalization of activities in the intensive,” the IMF said on Tuesday, when it published the document World Economic Outlook Reports: Confronting the Cost of Living Crisis.
However, growth in the region is expected to slow in late 2022 and 2023 as partner country growth weakens, financial conditions tighten and commodity prices decline. .
The IMF expects consumer prices to end the year with a 14.6% rise in the region, with the inflation rate projected to slow to 9.5% next year.
“Global economic activity is experiencing a widespread and sharper-than-expected slowdown, with inflation at its highest in several decades. The cost-of-living crisis, tightening financial conditions in most regions, the Russian invasion of Ukraine and the persistence of the COVID-19 pandemic have a significant impact on the outlook,” the financial institution said.
World Bank projections showed last week that regional economic output in Latin America and the Caribbean will grow 3% this year and slow to 1.6% in 2023, progress described as insufficient to significantly reduce poverty.
Inflation continues to be a concern in developed and emerging markets according to the IMF’s perspective.
The IMF expects consumer prices to end the year with a 14.6% rise in the region, with the inflation rate projected to slow to 9.5% next year.
According to forecasts, global growth will slow from 6.0% in 2021 to 3.2% in 2022 and 2.7% in 2023. Excluding the global financial crisis and the acute phase of the COVID-19 pandemic, this is the weakest growth profile since 2001.
Inflation
Global inflation is forecast to rise from 4.7% in 2021 to 8.8% in 2022, before falling to 6.5% in 2023 and 4.1% in 2024.
For emerging and developing economies, the IMF expects inflation to rise to 9.9% in 2022, from 5.9% in 2021, before slowing to 8.1% next year.
The financial institution indicates that the course of monetary policy must be maintained to restore price stability, and fiscal policy must seek to alleviate pressures on the cost of living, maintaining a sufficiently restrictive orientation so that it is aligned with monetary policy.
To further contribute to the fight against inflation, structural reforms that improve productivity and ease supply constraints can be resorted to, while multilateral cooperation is necessary to accelerate the transition to green energy and avoid fragmentation, advises the IMF.
[Contiene información de Reuters]
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