Ministry of State/Economics can expedite the state

“It hurts to say, but it must be said”

The International Monetary Fund (IMF) is revising its forecasts in its “World Economic Outlook” (last January’s update, or “World Economic Outlook Update (WEO)”), titled “Global recovery slows as disparities between economic sectors and regions widen”, as problems in the economy persist. , emphasizing low growth and high differences between parties.

Global growth is projected to slow from an estimated 3.5% in 2022 to 3.0% in 2023 and 2024. Monetary policy interest rate hikes by central banks to combat inflation continue to weigh on economic activity. The headline level of global inflation is expected to decline from 8.7% in 2022 to 6.8% in 2023 and 5.2% in 2024. Core inflation has been revised down to forecasts for inflation in 2024 and is expected to ease gradually.

A recent deal to raise the U.S. debt ceiling and firm measures earlier this year by authorities in the U.S. and Switzerland to curb banking turmoil have reduced immediate risks of disruption in the financial sector. This mitigated the risks of adverse vision. However, given the prevailing risks, the outlook for global growth is tilted to the downside. Inflation could be higher if additional shocks, such as an escalation of the war in Ukraine and extreme weather events, trigger a more restrictive monetary policy. Turmoil in the financial sector could return as markets adjust to further policy tightening by central banks. China’s recovery may be slow, partly due to unresolved real estate issues, which could have negative cross-border contagion effects. The sovereign’s high debt pressures could spill over into the broader economic bloc. On the positive side, inflation may decline faster than expected, reducing the need for tighter monetary policy, and domestic demand will once again prove resilient.

In most economies, the priority is to achieve sustained inflation while ensuring financial stability. Therefore, central banks should focus on restoring price stability and strengthen financial supervision and risk monitoring. If market tensions develop, countries should provide liquidity without delay while mitigating potential moral hazard. They need to build financial buffers, and ensure that the mix of financial adjustments pays support to the most vulnerable. Improving the supply side of the economy will facilitate fiscal consolidation and encourage a smooth decline in inflation towards target levels. This is how the sequence of problems reads.

Global growth is projected to slow from an estimated 3.5% in 2022 to 3.0% in 2023 and 2024. Monetary policy interest rate hikes by central banks to combat inflation continue to weigh on economic activity. The headline level of global inflation is expected to decline from 8.7% in 2022 to 6.8% in 2023 and 5.2% in 2024. Core inflation has been revised down to forecasts for inflation in 2024 and is expected to ease gradually.

A recent deal to raise the U.S. debt ceiling and firm measures earlier this year by authorities in the U.S. and Switzerland to curb banking turmoil have reduced immediate risks of disruption in the financial sector. This mitigated the risks of adverse vision. However, given the prevailing risks, the outlook for global growth is tilted to the downside.

Inflation could be higher if additional shocks, such as an escalation of the war in Ukraine and extreme weather events, trigger a more restrictive monetary policy. Turmoil in the financial sector could return as markets adjust to further policy tightening by central banks. China’s recovery may be slow, partly due to unresolved real estate issues, which could have negative cross-border contagion effects. The sovereign’s high debt pressures could spill over into the broader economic bloc. On the positive side, inflation may decline faster than expected, reducing the need for tighter monetary policy, and domestic demand will once again prove resilient.

In most economies, the priority is to achieve sustainable inflation while ensuring financial stability. Therefore, central banks should focus on restoring price stability and strengthen financial supervision and risk monitoring. If market tensions develop, countries should provide liquidity without delay while mitigating potential moral hazard. They should also build financial buffers, and ensure that the mix of financial adjustments pays support to the most vulnerable. Improving the supply side of the economy will facilitate fiscal consolidation and encourage a smooth decline in inflation towards target levels.

The International Monetary Fund (FMI) was reviewed raise theirs Growth projections for Latin America and the Caribbean Thanks to stronger-than-expected growth in the region’s biggest economies, Brazil and Mexico.

In a published revision of its global economic forecasts, the IMF believes Latin America will grow by 1.9% in 2023, three-tenths more than forecast in AprilAnd for 2024 it maintained a projection of 2.2% for the region as a whole.

Latin American growth will be strong this year and next Much less than 2021, when it rose to 7% and 3.9% in 2022, when it continued its post-pandemic recovery. He explained in an interview The Fund’s Director of Research, Pierre-Olivier Gourinchas, Domestic demand in the region is “relatively strong”.This year is expected to weaken compared to 2022.

He recalled that it was the region that first used restrictive monetary policy to fight inflation, its central banks responding long before the US Federal Reserve or the European Central Bank acted, and making its economy feel the effects of rate hikes. .

For this reason, even if inflation is reduced in the region, The recession was the result of a year and a half of restrictive monetary policy. For these reasons, growth will be lower than last year, but not lower than that calculated in April by the Fund, thanks above all to the better performance of Brazil and Mexico.

So, the IMF now expects 2.1% growth for BrazilThis is 1.2 percentage points higher than forecast in its previous report, and it expects growth of 1.2% for 2024, three-tenths less than previously calculated.

to MexicoThe fund expects growth this year 2.6%, That’s eight-tenths more than estimated in April, and it cuts growth to 1.5% for 2024.

In this review, report Individual data from other countries in the region (such as Paraguay) are not included. But it is important to note that the Itaú (Brazil) monthly report raised our country’s growth from 5% to 5.6%.

As Gaurinchas points out, Brazil has achieved a “significant recovery” in its agricultural sector And it extends to other sectors like services, profit optimization etc. “The country’s economy is doing well.That is why their forecasts for this year will improve, he said.

As for Mexico, Gourinjas emphasized that the country’s economy is also doing “very well” because of its close economic ties with the United States.

He recalled that this year’s growth forecast for the US had improved by two tenths to 1.8%, and that Mexico, “its most important trading partner”, would feel the “consequences” of said improvement.

Also, looking at the medium term, Mexico may also have another important advantage And this is the role it can play in a situation Geo-economic fragmentation.

In this sense, he pointed out that there are currently many discussions about trends such as “nearby”, moving businesses to nearby countries, and that Mexico is going to benefit from its relationship with the United States.

In Argentina’s case, the IMF warned that the country would suffer 2.5% recession this year and expected it to grow by 2.8% in 2024. In this way, he sharply reduced his previous forecast for the country, which in April marked the slowest growth of 0.2% this year. On the other hand, the forecast for next year improved compared to the 0.8% estimated last April.

The IMF finally adjusted Argentina’s growth to a level compatible with the effects of the drought. They increased the growth of 2024, although it did not compensate. Summary of Global Risks: Latin America is not exempt from being affected by downside risks that could worsen the statistics of economies around the world, and the IMF cited in its World Report.

In most economies, the priority is to achieve sustainable inflation while ensuring financial stability.

The IMF revised its growth forecasts upward due to higher-than-expected growth in Brazil and Mexico, the largest economies in the Latin America and Caribbean region.