IMF Predicts Latam to Grow 3% This Year, Despite Facing Economic Deceleration and Rising Inflation

IMF Predicts Latam to Grow 3% This Year, Despite Facing Economic Deceleration and Rising Inflation

The International Monetary Fund is predicting that Latin America (Latam) will keep growing this year, reaching a growth rate of 3% even with all of the difficulties that the region is facing. The institution believes that the economic recovery that Latam is enjoying after the Covid-19 pandemic will be decelerated by several factors, including the macroeconomic conditions, rising inflation, and increasing social tensions amidst energy and food insecurity. IMF Predicts Latam Will Keep Growing

The International Monetary Fund has issued a series of predictions on the growth and the possible difficulties that Latam will be facing in the second half of 2022. After examining all of the variables, the institution predicts that the region will grow by 3% in 2022, fueled by the economic recovery and the reopening of many industries that were hit by the Covid-19 pandemic.

This upgraded forecast is higher that the earlier prediction the International Monetary Fund had made, expecting the region to grow by just 2.5%. However, even with this positive prediction, the fund states that there are many factors that will test the economic performance of Latam later this year.

These factors, which include the macroeconomic conditions the world economy is facing, an increasingly inflationary panorama, and the social tensions in the region, have taken the International Monetary Fund to downgrade its growth forecast to 2.5% in 2023. Shifting Global Winds

The organization explains how these factors are worsening, with the inflationary pressures and global deceleration being the most important. In regards to the inflation problem, the institution expects it to keep growing and exceed earlier records. It states:

Inflation… has accelerated throughout the region, amid rebounding domestic demand, lingering supply chain disruptions, and rising commodity prices.

The fund expects inflation rates to outgrow the central banks’ target ranges in Brazil, Chile, Colombia, Mexico, and Peru.

All of this panorama will make regulating and policymaking a difficult task in the coming months. Lawmakers will have to balance economic stability and social policies to aid the troubled ones, avoiding social crises and institutional stability problems in the process.

The International Monetary Fund is not the only institution worried about the difficulties Latam is facing. The Bank of Spain has expressed these same worries in a report issued recently, where it warns that institutional instability might appear as a consequence of the “loss of purchasing power that the most vulnerable households have been suffering in recent quarters due to the rise in inflation.” Tags in this story Brazil, Chile, colombia, Covid-19 pandemic., deceleration, Economy, inflation, International Monetary Fund, Mexico, Peru

What do you think about the latest predictions of the International Monetary Fund on Latam? Tell us in the comments section below. Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved. Goldman Sachs, JPMorgan Predict Euro-Area Recession ECONOMICS | 9 hours ago Despite the White House Debate, Critics Insist US Officially in a Recession After 2 Consecutive Quarters of Negative GDP Growth ECONOMICS | 18 hours ago

Image Credits: Shutterstock, Pixabay, Wiki Commons, Poetra.RH, Shutterstock.com Previous articleMeta’s Metaverse Is Still Not Profitable: Reality Labs Unit Registers $2.8 Billion Losses During Q2 Next articleIran Amends Regulations to Ease Crypto Miners’ Access to Renewable Energy Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItRipple CEO: SEC Lawsuit Over XRP "Has Gone Exceedingly Well"

The CEO of Ripple Labs says that the lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against him and his company over XRP "has gone exceedingly well." He stressed: "This case is important, not just for Ripple, it’s ... read more.NFT Sales Volume Saw a Small Uptick This Week — Moonbirds, Mutant Apes Take Top Sales Bill ‘On Digital Currency’ Caps Crypto Investments for Russians, Opens Door for Payments Goldman Predicts US Recession Odds at 35% in 2 Years, John Mauldin Wouldn"t Be Surprised if Stocks Fell 40% Privacy-Centric Monero Plans for July Hard Fork, Plans Include Ring Signature, Bulletproof Upgrade