Implications for the Latin American and Caribbean Region; 1. Cross-Country AnalysisSectoral Evidence; Policy Implications; 2. With global monetary policy likely to remain accommodative, capital flows could exacerbate overheating and amplify vulnerabilities in emerging markets. With global monetary policy likely to remain accommodative, capital flows could exacerbate overheating and amplify vulnerabilities in emerging markets. There is also a considerable amount of heterogeneity within the region, with a few countries losing significant ground in terms of development prospects notably, Venezuela.
In Chile, economic activity is gaining momentum after a prolonged slowdown, benefiting from improved external conditions and domestic sentiment. Fiscal consolidation should be calibrated to avoid sharp drags on growth, and to protect the most vulnerable people, including by improving the efficiency and quality of education and health spending and increasing targeted social spending. At the same time, the upward trend in current spending, which began during the commodity price boom, continued in several countries, even following the bust. Higher commodity prices are contributing to an improved outlook for commodity exporters. This trend is expected to continue in 2018, supported by higher economic growth in the United States, which is the main market for most destinations in the region, with a few exceptions for example, Barbados is heavily dependent on tourism from the United Kingdom. As with any perception indicators, point estimates are subject to uncertainty.
Still, there are a number of downside risks going forward. Countries with strong real linkages to the United States face a somewhat weaker outlook and should give priority to reducing public debt. Effective macroeconomic policy management and implementation is needed to avoid boom-bust cycles with which Latin America is all too familiar. However, softer growth and an appreciation of the sol led inflation to close the year at 1. Summary of Empirical Literature List of Country Abbreviations References New Publications from the Western Hemisphere Department Boxes 1. A Tale of Two Regions, by Evridiki Tsounta. .
Increases in the efficiency of public expenditure and in tax collection would help address growing spending pressures from infrastructure needs and entitlements. For others, weak growth in the United States and other advanced-country partners, or homegrown fiscal problems, will hold back activity. Note: Real ex ante policy rates calculated as the difference between the policy rate and the one-year-ahead inflation expectations. Specifically, a long-awaited recovery after several years of subpar growth reflected a synchronized global upturn, as well as some domestic policy adjustment. While risks appear broadly balanced in the near term, they skew to the downside over the medium term, including a possible sharp tightening of financial conditions, waning popular support for global economic integration, growing trade tensions and risks of a shift toward protectionist policies, and geopolitical strains. The report then explores the policy options facing governments in the region, underscoring the need to preserve the gains of recent years Author by : International Monetary Fund. Declining current account deficits contributed to a strengthening of reserve buffers in some countries Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua.
Despite the recent deterioration in the global economic environment, projections for the region involve only a modest worsening of the outlook. Moreover, a well-designed and transparent fiscal adjustment plan would enhance policy credibility and investor confidence, which is also conducive to more favorable funding conditions, particularly for countries that pay higher average spreads relative to other countries with comparable credit ratings , and could engender stronger public support. Higher commodity prices are contributing to an improved outlook for commodity exporters. Although the growth projection for 2015 remains slightly positive for Argentina, partly because of a major fiscal incentive, the economy is expected to contract in 2016. While risks appear broadly balanced in the near term, they skew to the downside over the medium term, including a possible sharp tightening of financial conditions, waning popular support for global economic integration, growing trade tensions and risks of a shift toward protectionist policies, and geopolitical strains. An increasing number of advanced economies are also offering economic residency programs.
Searching for Effects of Intervention: New Evidence; An Econometric Panel Approach; 3. That said, despite their recent acceleration, exports from the region are not fully reaping the benefits of the global trade boost, with real export growth in several countries not keeping pace with the growth of external demand. While weak productivity reflects a variety of underlying causes, misallocation of capital and labor resources appears to play an important role ; Chapter 2 of the April 2017 Fiscal Monitor. Research has shown substantial inefficiencies in the allocation of resources across manufacturing firms in Latin America , using census data from earlier periods. Formal wage bargaining should ensure the representation of all stakeholders, including all firms in the agreement and the unemployed, to limit the possibility of creating wedges between labor productivity and wages. Commodity prices have, however, partly rebounded since early 2016. The Orbis data are scarce for the United States and plentiful for the United Kingdom.
A sharp slowdown in Asia, for example in response to a recession in advanced economies, could impact commodity prices, with negative effects on Latin American commodity exporters. The uptick in activity will lead to a moderate deterioration of the current account. Latin America: Fiscal Adjustment with Social Cohesion; 2. Author by : International Monetary Fund. Terrier Gilbert Rodrigo Valdés Camilo E. Structural reforms are also needed to address lingering competitiveness problems. And third, this environment creates opportunities for Latin America-opportunities to build on the resilience and flexibility that has served it so well during the global crisis of 2008-09.
Second, data on nonfatal crime are often underreported, especially if citizens see little return to reporting. Since October 2017, global growth outcomes and the outlook for 2018—19 have improved across all regions, reinforced by the expected positive near-term spillovers from tax policy changes in the United States. Series: Regional Economic Outlook Author s : International Monetary Fund. Demand growth in Grenada has remained steady but relatively modest, while the newly established program in St. Going forward, growth heterogeneity in the region is expected to decline, and a broad-based acceleration in economic activity is expected. Recovering oil and food prices, the pickup in domestic demand, and to some extent the pass-through from exchange rate depreciations Costa Rica contributed to the acceleration. Shaded area refers to the max-min range.