WASHINGTON – Argentina, Venezuela and Ecuador will join Brazil in recession in 2016 and the economy of the wider Latin American and Caribbean region will shrink by 0.3 percent for the second consecutive year, the International Monetary Fund says.
In its latest Regional Economic Outlook, the IMF forecasts contractions of 1 percent in Argentina and 8 percent in Venezuela, while anticipating a relatively mild downturn in Ecuador.
Despite global headwinds, the economies of Colombia, Chile and Peru will grow by between 2 percent and 3 percent, according to Alejandro Werner, director of the IMF’s Western Hemisphere Department.
“It’s been a rough start to 2016, as seen by the recent bouts of financial volatility, stemming from uncertainties related to the slowdown in China, lower commodity prices, and divergent monetary policy in advanced economies,” he said.
The IMF says the overall outlook for Latin America and the Caribbean outlook obscures significant sub-regional differences.
“While South America is heavily affected by the decline in commodity prices, Mexico, Central America, and the Caribbean are beneficiaries of the strengthening U.S. economy and, in most cases, of the oil price decline,” Werner said.
Mexico’s GDP will grow roughly 2.6 percent, while Central America and the Caribbean will expand by 3.9 percent, according to the latest IMF estimates.