WASHINGTON – The economy of Latin America and the Caribbean will contract some 0.5 percent this year, the International Monetary Fund said Tuesday, though the northern part of the region is set to fare notably better than the south.
These projections appear in the World Economic Outlook report, presented at the start of a joint meeting of the IMF and the World Bank in Washington.
The IMF says that, though the overall GDP of Latin America and the Caribbean will deflate in 2016 for the second straight year, economic growth will return to the region in 2017 with an expansion of 1.5 percent.
But in 2016 the plunging prices of oil and other commodities are dividing the region in two.
In this context, the IMF estimates that Mexico will continue growing at the moderate pace of 2.4 percent this year and 2.6 percent in 2017, thanks to the “robust U.S. economy” and healthy domestic demand.
In Central America, Guatemala will grow by 4 percent this year, El Salvador by 2.5 percent, Honduras by 3.5 percent, Costa Rica by 4.2 percent, and Panama by 6.1 percent
In the Caribbean, the Dominican Republic in 2016 will show a hike of 5.4 percent.
The other side of the coin is South America, where the drop in commodity prices and the deeper-than-forecast recession in Brazil are dragging the numbers down into negative territory.
In 2016, Brazil will have its second straight year with a 3.8 percent decrease.
Among South American exporters of petroleum, Colombia will grow this year by 2.5 percent, down from 3.1 percent in 2015, while Venezuela will continue this year “sunk in a deep recession,” as GDP dwindles a full 8 percent, following a 5.7 percent drop in 2015.
The Ecuadorian economy will shrink 4.5 percent in 2016.
Argentina, according to the IMF, will drop 1 percent this year, while Chile will be up 1.5 percent in 2016.
In Peru, growth will surge 3.7 percent this year, the IMF said.