The “restrictive” financial policy of the coming months will have effects on the economic growth of the region
MADRID, 2 Nov. (EUROPA PRESS) –
The International Monetary Fund (IMF) has warned about the risk posed by inflation for the Latin American region and has increased its inflation projections to 4.6% at the end of this year compared to last April’s report and to 9.5 % that of 2023.
In this sense, in the presentation of its economic prospects for Latin America and the Caribbean, the organization points to the rise in prices as “the third shock” that the Latin American economy has faced in recent years, after the pandemic and the war between Russia and Ukraine.
Among the reasons given, the IMF has highlighted the upturn in demand and the effect that the war in Ukraine has had on energy and food prices.
However, the acting director of the IMF’s Western Hemisphere department, Nigel Chalk, has highlighted the “rapid response” of the region’s monetary authorities to rising inflation -much earlier than in other economies-, which helped contain price pressures and keep long-term inflationary expectations anchored. “But inflation is still high,” he recalled.
In relation to how high inflation in the United States can affect it, Chalk has highlighted the resilience that Latin American economies are having at the moment, but has appealed to “not be complacent”, since the persistence that inflation will have in the future is unknown. North American country, and a negative evolution of this figure could be “very painful” for the region.
Amid global monetary and financial tightening, the IMF expects activity to slow across the region at the end of 2022 and in 2023, with growth of 3.5% and 1.7%, respectively.
With this possible worsening of the Latin American economies, the IMF has also focused on an increase in social unrest, considering this as a “significant risk”.
“To reduce uncertainty and keep inflationary expectations anchored, it will be essential to clearly communicate policy intentions, while compensatory measures that are inclusive and take into account the most vulnerable must be promoted,” they explained from the agency.
