Latin America’s Strong Recovery is Losing Momentum, Underscoring Reform Needs by Ilan Goldfajn, Anna Ivanova and Jorge Roldos published by IMF (1/2022).
“Governments will need to combine fighting inflation with structural policies that reignite growth.
Economies in Latin American and the Caribbean are losing steam after making a strong comeback last year.
After a dramatic economic collapse in 2020, growth in the region rebounded to an estimated 6.8 percent, driven by robust trading partners growth, higher commodity prices, and favorable external financing conditions. On the domestic front, progress on vaccinations, continued fiscal support in some countries (e.g. Chile and Colombia) and accumulated savings from 2020 also supported growth.
For 2022, we expect growth to slow to 2.4 percent, a downgrade from our October forecast of 3 percent.
A slowdown is inevitable as economies return to their pre-pandemic GDP levels. But the downgrade reflects other challenges, including slower growth in China and the United States, continued supply disruptions, tighter monetary and financing conditions, and the emergence of the Omicron variant…”
