IMF upgrades economic growth forecast for Latin America

It has also forecast an increase in global economic growth forecasts to 5.5 % in 2021
Atalayar_Economía America Latina

REUTERS/HENRY ROMERO  -   Audi production line at the German car manufacturer's plant in San José Chiapa, Mexico

The International Monetary Fund (IMF) raises its forecast for Latin America's economic growth in 2021 to 4.1%. In 2020, Latin America's regional economy plunged by 7.4% according to the Global Economic Prospects report. 

In October it had estimated growth of 3.6%, five tenths of a percentage point lower than the current provision, but as the process of distributing vaccines accelerates it is growing. 

This year Brazil will have a year of 0.8 percentage points above the expected percentage, with a growth of 3.6%. On the other hand, Mexico's economy will grow by 4.3 percentage points, 0.8 percentage points more than the IMF's October projection. 

The IMF document does not include forecasts for more Latin American countries.

"There are many different levels of contraction in the region, many factors are at work, including the fiscal support provided. These are very challenging times for Latin America," Gita Gopinath, IMF chief economist, told a press conference.

On emerging economies, the Fund report warned of "particular difficulties" for oil-exporting and tourism-based countries due to the expected "slow normalisation of international travel and the depressed outlook for oil prices."

The International Monetary Fund has also forecast an increase in global economic growth forecasts to 5.5 % in 2021, three tenths higher than anticipated in October, thanks to expectations of a recovery from vaccination and additional fiscal support in the United States and Japan.

The world's two big economies, the United States and China, will expand by 5.1 and 8.1 per cent, respectively, this year, according to the Fund's new Global Economic Prospects report.