LIMA – Latin America and the Caribbean will see output slip 0.3 percent this year amid the fall in commodities prices and deepening economic woes in Brazil and Venezuela, the International Monetary Fund said on Tuesday.
“Economic activity in Latin America and the Caribbean continues to slow sharply,” according to the Fund’s World Economic Outlook, released in Lima at the opening of the IMF/World Bank annual meeting.
“The bleaker outlook for commodity prices interacts in some countries with strained initial conditions,” the report said, pointing to Brazil and Venezuela.
IMF economists expect a 3 percent contraction in Brazil this year, while Venezuela’s economy is forecast to shrink 10 percent.
Citing a slump in prices for metals, the IMF revised downward its projections for expansion in Chile and Peru, to 2.3 percent and 2.4 percent, respectively.
The forecast for growth in Colombia was trimmed to 2.5 percent in light of declining oil prices.
As recently as July, the IMF was predicting growth of 0.5 percent in Latin America and the Caribbean this year.
The IMF estimates that the region’s economy will grow next year by 0.8 percent, a rate “still well below trend” for the region.