The IMF predicts that Argentina will grow less

Today 16:54 –

The International Monetary Fund (IMF) Monday adjusted its economic growth forecast for Latin America, in the Argentina third economy of the region, will have an impact on the slowdown due to "the contraction of financial conditions and the necessary adjustment of policies".

Argentina was shaken by an acute financial crisis in the first half of this year that led the government to resort to the IMF for a $ 50 billion credit.

However, the country continues with a high annual inflation of 30% and a reference interest rate of 40% pa in pesos, one of the highest in the world.

In his report Prospects for World Economic Outlook (WEO) of July 2018 (based on data collected up to last April), the agency of credit further stated that Latin America and the Caribbean will grow less in 2018 and 2019, mainly due to a recent appreciation of the dollar and an increase oil prices.

In its updated economic forecast for April, the entity has revised down 0.4 percentage points, from 2.0% to 1.6%, its growth forecasts for the year ahead. 39, economics of Latin America and the Caribbean We recommend: Solá: "If the IMF's recommendations are respected, it will revive 2001"

The Fund pointed out that this reduction is a reflection of the need for adjustments in Argentina, scenario of political uncertainties in Brazil and still unresolved trade tensions between Mexico and United States.

The agency projects "that growth in Latin America will experience a slight increase, from 1.3% in 2017 to 1.6% in 2018 and 2.6% in 2019 ( 0.4 and 0.2 percentage points less than expected in the April report on the Employment Outlook. "

" Although rising commodity prices continue to support exporters in the region, the prospects for the April edition reflect the complication of prospects for major economies, due to the contraction of financial conditions and the necessary adjustment of policies (Argentina the lingering effects of strikes and political uncertainty (Brazil), and the trade tensions and prolonged uncertainty surrounding the renegotiation of NAFTA and the new government's policy agenda (Mexico) ", said the multilateral entity

" The prospects of Venezuela, which s ubit a drastic collapse of activity and a humanitarian crisis, were revised downward despite the rebound in oil prices since production fell sharply, he added.

In the case of Brazil, it was pointed out that growth prospects are "not very encouraging" because "the economy is performing below its potential, public debt is high and rising, and more importantly, medium-term growth prospects remain weak. " For 2018, the IMF forecasts 1.8% growth in Brazil; For Mexico, the IMF maintained its unchanged growth forecast from April or 2.3%, although it reduced the forecast in 2019 by 3.0% at 2.7%.

Among the general points of the report, the IMF pointed out that "many emerging and developing countries need to strengthen their resilience through an appropriate mix of fiscal, monetary, currency and prudential policies to mitigate the vulnerability of investors. aggravation of global financial conditions strong currency fluctuations and capital flow reversals. "

" In general, it will be important to maintain flexibility would change to cushion the impact of shocks adverse effects, although it is necessary to closely monitor the effects of exchange rate depreciations on the private and public sector balance sheets and domestic inflation expectations, "said the Fund's report.

It is recalled that under the conditions agreed on the stand by with Argentina, the body proposed that the quotation of the dollar be established by the offer and the demand for the foreign exchange market itself, without official intervention.