Latin America's Economic Forecasts May Be Too Rosy
What's most interesting about the World Bank and International Monetary Fund economic projections is not that they forecast a slower-than-expected growth in Latin America for 2014 - we already knew that - but that they foresee a rebound in 2015 and 2016.
According to the IMF's semi-annual report released at its spring meeting in Washington on April 8, Latin America's economy will grow by 2.5 percent this year, and by 3 percent next year. That's lower than the region's growth rates in the past decade, but suggests that its economies may soon begin to rebound.
The World Bank, in its "consensus forecast" based on nearly three dozen projections by mostly private sector banks, said that Latin America's economy will grow by 2.3 percent this year, and by 3 percent in 2015. In January, the World Bank had forecast an "upbeat" future for the region, forecasting a 3.7 percent growth rate in 2016.
Among the region's largest economies, the best-performing one will be Mexico, which is scheduled to grow by 3 percent this year, and by 3.5 percent next year, the IMF said. "Mexico's ongoing economic reforms, especially in the energy and telecommunications sectors, herald higher potential growth for the medium term," the IMF said in its report.
Other countries that will show healthy growth rates will be Peru, (projected to grow by 5.5 percent this year and 5.8 percent next year,) Bolivia (5.1 percent this year and 5 percent next year,) Paraguay (4.8 percent this year and 4.5 percent next year), Colombia (4.5 percent both years) and Chile (3.6 percent this year and 4.1 percent next year,) the IMF said.
Among the countries that will show meager growth are Brazil, the region's largest country, which is projected to grow by 1.8 percent this year and 2.7 percent next year, according to the IMF. Brazil's economy will continue to suffer from a "loss of competitiveness and low business confidence," the IMF said.