Latin America Expected to Grow 1.6 Percent in 2020 and 2.3 Percent in 2021, Says IMF

RIO DE JANEIRO, BRAZIL – Alejandro Werner, director of the International Monetary Fund‘s (IMF) Western Hemisphere Department, said that low growth in Latin America and the Caribbean in 2019 was driven by low investment, well-behaved commodity prices, and uncertainties in the region’s economic policy management.

According to Werner, Latin America is expected to grow 1.6 percent in 2020 and 2.3 percent in 2021, primarily as a result of a rebound in global aggregate demand and low interest rates at the international level.

“However, all countries in the region should improve their public spending efficiency,” Werner said, noting that monetary policy in several Latin American countries may continue to be accommodating.

The IMF director commented at a press conference on the Fund’s updated growth projections for Latin America.

Reforms in Brazil

Werner said that “it is important that tax reforms continue to progress in Brazil“, when answering a question from Broadcast (the Estado Group’s real-time news system) regarding its prospects for Congress to pass structural changes this year, including the national tax system.

“There was a broad consensus with the passing of the Social Welfare reform and reforms will increase the country’s fiscal framework,” said the IMF director. “There has been some progress in the reform agenda discussions in 2019. With a reduction in interest rates in a context of low inflation and an environment of lower uncertainties, plus the acceleration of the activity level, Brazil’s GDP will exceed two percent in 2020”.

Projections for Brazil

The Fund projects that the Brazilian economy should grow 2.2 percent this year and 2.3 percent in 2021.

Source: Estadão Conteúdo