The International Monetary Fund's April World Economic Outlook report has good news for the world, but not so much for Latin America. While the Fund boosted its estimate for global GDP growth by 0.1 percent, it cut projections for Latin America and the Caribbean by 0.5 percent. Now the world is expected to grow 3.5 percent in 2017, while the region’s total GDP will expand just 1.1 percent.
Mexico and Venezuela are part of the problem. The IMF’s original 2017 projections were released in October 2016, before the U.S. elections. Now uncertainty surrounding the future of relations between Mexico and its largest trading partner is affecting the Latin American country’s prospects. For Venezuela’s part, economic turbulence and political unrest have investors on edge.
But there’s good news for Brazil, the region’s largest economy. Though its GDP will grow a mere 0.2 percent this year, the rate will hit 1.7 percent growth in 2018. That’s up from the IMF’s January forecast of 1.5 percent for next year. The Fund cites increased political stability for the boost, plus the lower inflation and deficit trims. In February, Brazil saw net job growth for the first time in 22 months.