The war in the Middle East should have an “uneven” impact on Latin America and the Caribbean, but inflation should rise in all countries in the region, warned the International Monetary Fund (IMF) in a report published this Friday (17).
Oil producers like Brazil, however, are benefiting from high energy prices. At the same time, faced with changes in capital flows and greater risk aversion on the part of investors, the organization recommends preserving the credibility of monetary and fiscal policies to overcome the new shock.
“The impact on economic activity will vary greatly between countries, but the impact on inflation is more uniform. Inflation will be higher for everyone”, highlighted the director of the IMF’s Western Hemisphere department, Nigel Chalk, when commenting on the Fund’s prospects for Latin America and the Caribbean, during the Spring meetings, taking place in Washington, in the United States.
The IMF improved expectations for the Gross Domestic Product (GDP) of Latin America and the Caribbean to an increase of 2.3% this year, 0.1 percentage points (pp) above the last update made in January. Next year, the Fund expects the region to accelerate its pace and grow 2.7%, a forecast that was maintained.
Among the highlights of growth in Latin America are countries such as Paraguay, Argentina, Ecuador, Chile and Colombia.
The projection improved by 0.3 pp and 2.0% in 2027. On the other hand, Bolivia should face another year of recession, predicts the Fund.
“Producers from – Argentina, Brazil, Canada, Colombia, Ecuador, Guyana, Trinidad and Tobago, the United States and Venezuela – are benefiting from high energy prices,” said Chalk.
These countries are benefiting because the commodity shock strengthens the balance of payments, supports growth and helps government finances, but even in these economies, he warns: the most vulnerable will be hit hard by higher energy and food prices.
*Content prepared with the help of Artificial Intelligence, reviewed and edited by the Broadcast Editorial Team, Grupo Estado’s real-time news system
