IMF admits economic concern over ‘civil unrest’ in Brazil and Peru

The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, warned this Thursday, 12, that there is concern about “civil unrest” in countries such as Brazil and Peru, which could lead to an economic slowdown in the region.

“There is concern about developments on the fronts of civil unrest. What we’ve seen in Latin America over the last year is a very significant political shift and it’s driven by underlying economic factors in Latin America. It remains to be seen whether this leads to a further slowdown,” Georgieva declared in a meeting with a group of journalists.

According to the IMF’s latest report on the World Economic Outlook, which will be revised later this month, the region will only grow by 1.7% this year, but almost all countries – except Chile – will manage to get out of the recession.

Therefore, the region is not included in the organization’s projections that warn that this year a third of the world economy will enter a recession.

“What’s really disappointing is that Latin America has such huge potential to grow (…) It’s a story of under-exploited potential,” she added.

In this regard, Georgieva stressed that the possible consequences of civil unrest must be closely watched.

“What we see at the beginning of the year is that social cohesion is not guaranteed and we see social unrest for different reasons. It’s only January 12th and we have Brazil, Peru, Bolivia, Colombia, the UK… all for different reasons, but with clear social tensions (…) What this means in the future is obviously too early to say, but I think we have to watch ”, she considered.

The managing director of the Fund predicted a difficult year for the world economy and, since the work of central banks “is not yet done” and “they will have to continue pressing to achieve price stability”, the consequences are not yet known in the labor market, which may increase tensions.

With information from EFE/Jovem Pan

Related coverage: What jurists say about STF banning demonstration in Brazil · Inflation in Brazil increases for all income groups in December, says IPEA · Lula da Silva raises the tone with the military · Itaú bank warns shareholders about risks posed by Lula da Silva's economic policy

More: Brazil news in English, every day from The Rio Times.

Editorial responsibility: Matthias Camenzind, Editor-in-Chief · Editorial standards · Report an error