MEXICO CITY, Mexico, in April. 12 2016.- Mexico will grow 2.4% in 2016 and 2.6% next year, according to forecasts by the International Monetary Fund (IMF). Even so, the new estimates accounted decreases over the already discounted calculations had offered in January, highlighting a gradual reduction of optimism about Mexico.
The outlook for Mexico looks more favorable, as the country “continue to grow at a moderate pace (…) underpinned by a healthy private domestic demand and spill a robust US economy effects”, as quoted by the agency based in Washington.
in the case of Brazil , the international body expected to fall 3.8% this year and in 2017 there will be more recoil, but not growth. Argentina also have red figures this year, according to the IMF, with a drop of 1.0%. Venezuela has the largest drop zone, a decrease of 8.0% for 2016 and a contraction of 4.5% in 2017.
The IMF warned that the economy of Latin America and the Caribbean will suffer a recession more deeper than previously estimated due to a worsening of the historic slump in activity in Brazil and a moderate performance in Mexico.
the international lender projected in its latest edition of Outlook for the World Economy the production of the Latin America and the Caribbean will contract 0.5 percent in 2016, down slightly steeper than the 0.3 percent it had estimated the agency in January.
on Brazil, the report said “many large disturbances 2015 and 2016 will have run its course, and with the help of a weaker currency, growth is projected to be positive during pass to 2017. However, average production will likely continue unchanged.”
the Fund warned that its forecasts about the country were subject to “great uncertainty”. The report said that “possible delays in the return to more normal conditions” in Brazil and Russia could push back the global growth below the current forecast.
The Brazilian economy is undergoing the second year that It is expected to be its worst recession in more than a century. The activity slowed, unemployment rises and inflation remains high, given the concern about the impeachment process of President Dilma Rousseff and a vast corruption scandal.
Peru resubmitted the best panorama Latin America, with growth expected progress in 2016 and next year, 3.7 percent and 4.1 percent respectively. The IMF attributed the improvement to a strengthening of activity in the sector of natural resources, including mining.
However, projections for other countries in the region continued dumpy. Chile would be affected by the decline in copper prices, Colombia by the decline in the value of oil, Argentina would have a slight recession this year by the adjustment through and Venezuela remain in an acute crisis.
The Fund he stressed that downside risks to the global outlook have increased over January, when it issued its previous projections due to the intensification of a number of factors such as the impact of the economic transition of China and the adjustment of global liquidity.
in the first quarter, emerging economies -including Latin America- were hit by a collapse of markets and high volatility that erupted when the US Federal Reserve raised its rate for the first time in nearly a decade, what bad news from China joined
As policy recommendations in general in this scenario., combined with the forecast lower prices of raw materials for an extended period, the IMF recommended to emerging countries maintaining exchange rate flexibility, monitor the impact of this approach on inflation and adjust spending.
the report cited recipes for particular countries, including Brazil. “The government should persevere are their fiscal consolidation efforts to promote recovery and investment trust (…) a reduction of inflation (…) will require a tight monetary policy.”
the International Monetary Fund on Tuesday cut its global growth forecast for the fourth time in a year, after pointing to the slowdown in China, prices persistently low oil and chronic weakness in some advanced economies.
Fund, whose meetings this spring with the World Bank held in Washington this week, expects the global economy to grow 3.2 percent in 2016, compared with an earlier forecast an expansion of 3.4 percent in January.
in its latest economic Outlook, the Fund warned of the widespread risk of stagnation and said weaker growth could make the world economy was more vulnerable to crises such as depreciations of currencies or worsening geopolitical conflicts.
the Fund urged global authorities attending meetings of the IMF and the World Bank to take coordinated action to boost demand, with structural economic reforms, fiscal incentives where possible and monetary policy expansive.
“A lower growth means less margin for error,” said Maurice Obstfeld IMF chief economist said in a statement. “A slow, persistent growth has effects (…) that reduce potential output and thus the demand and investment,” he added.
The IMF cut its growth forecast for Japan to half 0.5 percent in 2016 and said that Brazil’s economy would shrink 3.8 percent this year compared to the previous forecast of a decline of 3.5 percent, while the largest economy in Latin America is facing its worst recession in decades.
Meanwhile, the United States, one of the relatively positive points of the world economy, also saw trimmed its forecast an expansion of 2.4 percent in 2016 from 2.6 percent. The IMF forecast a fall in exports by a stronger dollar, while oil prices remain weak energy investments.
In addition, the agency raised its growth outlook for China slightly to 6.5 percent this year and 6.2 percent in 2017, partly due to stimuli previously announced. But he said he still expects Chinese growth continues to weaken while making the transition to a consumption-based economy.
“A slowdown more pronounced in China than currently projected could lead to strong international contagion through trade , prices of raw and trust matters and lead to a more widespread slowdown in the global economy, especially if cuts more expectations of future profits, “the IMF said.
These new perspectives are disclosed later of downward revisions in July, October and January.
Obstfeld said global growth could easily be weakened by the latest outlook from the IMF, which could reinforce the deflationary spiral of weaker growth important erosion potential future production. He said that this phenomenon is known in economic circles as “secular stagnation.”
He also indicated that growth persistently low could reinforce the perception of economic inequalities and encourage nationalist and protectionist policies, especially in the euro area , which could also reduce the potential of countries.
(Reuters information)
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