The International Monetary Fund forecasts the Uruguayan economy to grow by 3.7% in 2024

Growth in Brazil (2.2%, +0.5 percentage points compared to the previous forecast) would be lower than in 2023, but better than in January, due to the impact of currency adjustment and ongoing fiscal consolidation.

On the contrary, the Mexican economy fell by 0.3 percentage points to 2.4%, due, among other things, to a decline in the manufacturing sector.

The IMF’s economic forecasts for the rest of the region this year vary significantly: Bolivia will fall by 1.6%, Colombia by 1.1%, Ecuador by 0.1%, Paraguay by 3.8%, Peru by 2.5%. grow. Uruguay 3.7% and Venezuela 4%. Central America will grow by 3.9% and the Caribbean by 9.7%.

For Argentina, the financial organization sticks to its January forecast: GDP will contract by 2.8% this year due to fiscal adjustments implemented by the government of President Javier Milei to restore macroeconomic stability.

The forecast for inflation in Argentina is equally bleak. The organization expects it to reach 250% this year and fall to almost 60% in 2025.

WORLD ECONOMY

“The global economy continues to show significant resilience, with growth remaining stable and inflation declining, but many challenges remain,” Pierre-Olivier Gourinchas, chief economist at the International Monetary Fund, told reporters.

“The road has been bumpy” due to supply chain problems, a war in Ukraine that triggered an energy and food crisis, and a rise in inflation followed by a rise in interest rates, the IMF explains.

But “despite many dire predictions, the world managed to avoid a recession,” he adds.

And despite high interest rates and inflation that varies from country to country (close to target in Europe, low in China but still too high in the United States), the global economy is not stalling, thanks in part to solid employment and high inflation thanks to consumption.

US STRENGTH

This is the case of the world’s largest economy, the United States, which is expected to grow by 2.7% this year, compared to the 2.1% expected three months ago.

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“The very strong performance in the United States is the result of growth in productivity and labor supply, but also continued strong demand, which could drive inflation higher. This should prompt the Federal Reserve to take a prudent and gradual approach to easing its monetary policy, explained Gourinchas.

This trend is not reflected in the other advanced economies, especially in the Eurozone, where already weak growth is revised slightly downwards to 0.8% (-0.1 percentage points, pp.) due to the fragility of the region’s two main economies became: Germany and France.

Spain is one of the few exceptions, with a rise of 0.4 percentage points when the fund forecasts were updated to 1.9%.

CHINESE WEAKNESS

The forecasts for China are also unchanged, with growth expected to be 4.6% this year, a sign that the slowdown in the Chinese economy is continuing.

“Last month the Chinese government announced measures to stimulate the economy, but weakness in the real estate sector remains and our approach, taking these two factors into account, is to leave our forecasts unchanged,” explained Gourinchas.

As in 2023, the Russian economy remains solid this year despite international sanctions, with forecast growth of 3.2% (+0.6 percentage points compared to January). Because of public investment in military spending to finance the war in Ukraine, Russia keeps its machine running.

The IMF’s optimism is short-term. Global forecasts are not optimistic for the future.

The outlook is “below the historical annual average” from 2000 to 2019 of 3.8%, reflecting “constrictive monetary policy and the withdrawal of fiscal support as well as low underlying productivity,” said the report, known as the WEO (World Economic Outlook). Report. which the IMF is distributing at the start of its meetings in Washington this week.

And in the medium term, forecasts for production and trade remain the “lowest in decades”.

SPRING: AFP

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