IMF Sees Latin America Economic Upswing in 2015
International Monetary Fund (IMF) releases a new report with encouraging economic predictions.
The International Monetary Fund’s latest report predicts that Ecuador and Bolivia will be among top performers across Latin America in 2015.
The IMF predicts that economic growth in Latin American and Caribbean countries will slow down through 2014 but will also have strong recovery in 2015, according to the organization’s latest report released Tuesday.
“Growth declined further in early 2014 across the region, reflecting a slowdown in external demand as well as weaker domestic momentum,” says the report about the region’s economy.
According to the IMF, an increase in revenues from crude will benefit the region’s oil exporting countries such as Ecuador, Bolivia, Colombia, and Venezuela the most, though it will affect the rest of the countries as well.
The report, entitled Legacies, Clouds, Uncertainties, also states the countries that will perform the best are Ecuador, Bolivia, and Colombia. Ecuadorian President Rafael Correa has not only managed to push a social revolution in his country, but he has also worked to ensure good macroeconomic performance, since Ecuador’s GDP will increase by more than 4 percent in both 2014 and 2015. Ecuador’s own internal estimates suggest economic growth of 4.5% in 2015.
Ecuador, OPEC’s smallest-producing member, recently signed contracts with several companies, including Halliburton and Schlumberger Ltd., for a combined $2.12 billion investment to boost the nation’s crude output and reserves. The increase in exports are expected to offset any weakness in the price of oil.
According to the IMF, Bolivia will increase its gross domestic product (GDP) 5.2 percent in 2014, and 5 percent in 2015, while Colombia will grow 4.8 percent in 2014, and 4.5 percent in 2015 due to a strong construction activity.
Brazil’s full-year growth in 2014 will be 0.3 percent. “Weak competitiveness, low business confidence, and tighter financial conditions have constrained investment,” says the report. However, the institution also projects a recovery for Brazil in 2015, once the political uncertainty caused by this year’s election has passed away. The study projects a 1.4 percent growth for Brazil in 2015.
In countries such as Chile and Peru, sluggish growth in investment and consumption has slowed down the economy, but the fiscal and monetary reforms made by President Bachelet in Chile, and economic measures in Peru should help the recovery in 2015, says the report.
Vulture Funds have damaged Argentina’s projection in the study. The IMF says that the uncertainty and macroeconomic imbalances will cause the country to remain in recession during 2014 and 2015.
The IMF report notes that the top priority for the region is to maintain macroeconomic stability while increasing efforts to boost growth and jobs.