The IMF just released its Regional Economic Outlook Update for the Western Hemisphere. They are forecasting good things for Latin America and the Caribbean with output growth (nominal spending growth minus inflation) increasing to 4% in 2013 after slowing this year. To put this into perspective, in the same report, the IMF is predicting a lackluster 2.1% increase for the U.S.
The 2013 rising stars in the IMF report are Peru leading with 5.8%, Chile and Colombia tied at 4.4% and Mexico with 3.5% output growth. Although the IMF is predicting robust growth for these four countries, it is recommending that these four countries continue to reduce their government debt (I think the IMF wants its money back). Brazil is trailing behind at 4% in 2013. The IMF found that Brazil suffered the slowest growth in 2012 with only a 1.5% output growth.
The IMF predicts that the two key near-term risks to Latin America are a worsening debt crisis in Europe and a large fiscal adjustment in the US. Over the medium term, the main risk is China having a sharp slowdown because China is a key market for Latin America’s commodities.
“Latin America continues to face a global outlook with important tailwinds but significant downside risks,” said Saúl Lizondo, Associate Director of the IMF’s Western Hemisphere Department, at a press briefing held as part of the IMF-World Bank Annual Meetings.
With Miami as the gateway to Latin America, how is your company poised for the Latin American boom? Click here for the full article as well as a country-by-country chart.
