The International Monetary Fund (IMF) cut its Gross Domestic Product (GDP) growth forecast for the Latin America and the Caribbean to 1.0% in 2017 and 1.9% in 2018, from 1.1% and 2.0% respectively.
The IMF expects that after the 2016 contraction, economic activity in Latin America will gradually recover in 2017-2018, as countries like Argentina and Brazil emerge from recession.
According to the IMF’s quarterly report, Brazil’s growth forecast for 2017 is now higher due to a strong first quarter, but continued weakness in domestic demand and political uncertainty will lead to a moderate pace of recovery, and therefore to a lower projected growth in 2018.
Meanwhile, Mexico’s growth forecast for 2017 was revised upwards, from 1.7% to 1.9%, due to stronger activity in the first quarter, while the 2018 forecast was kept unchanged.
Revisions for the rest of the region were mainly downward, including in Venezuela, where economic conditions deteriorated further, the IMF said.