Latam and Caribbean economy to contract 0.6% this yearStaff Writer | October 7, 2016
International Monetary Fund (IMF) said that the economy of Latin America and the Caribbean will shrink 0.6% this year, compared with its earlier projection of a 0.5% contraction.
Predictions The report projects further deterioration in Venezuela
MF economists also expect the region as a whole to enjoy growth of 1.6% in 2017
“Confidence appears to have bottomed out in Brazil, and growth is forecast at -3.3% for 2016 and 0.5% in 2017, on the assumption of declining political and policy uncertainty and the waning effects of past economic shocks,” the IMF said.
The report projects further deterioration in petroleum-rich Venezuela, where gross domestic product declined 6.2% last year and is on course to fall another 10% in 2016 “as the decline in oil prices since mid-2014 has exacerbated domestic macroeconomic imbalances and balance of payments pressures.”
Venezuela's jobless rate will top 20% in 2017, the Fund said. Falling oil prices are also a factor in the economic woes of Ecuador, the IMF said, forecasting GDP declines of 2.3% this year and 2.7% in 2017.
Colombia and Chile are experiencing a slowdown this year, but remain in positive territory, with gains of 2.2% and 1.7%, respectively. Within the region, only Peru and Paraguay - each expanding at a 3.5% clip - are doing better this year compared with 2015.
Latin America's No. 2 economy after Brazil, Mexico, will end the year with growth of 2.1%, down from 2.5% in 2015, the IMF said, though adding that Mexico will resume an upward trajectory. ■