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These reports discuss recent economic developments and prospects for countries in various regions. They also address economic policy developments that have affected economic performance in the regions, and discuss key challenges faced by policymakers. They address regional policy developments and challenges, and provide country-specific data and analysis, including through analytical pieces on issues of interest to a particular region.
Western Hemisphere Region Update - Latin America and the Caribbean: Are Chills Here to Stay?Date: October 2016Economic activity in Latin America and the Caribbean is expected to bottom out in 2016, before making a modest recovery next year. While weak external demand and persistently low commodity prices continue to weigh on the regional outlook, domestic developments have been the key driver of growth outcomes in some stressed economies. GDP is expected to contract by 0.6 percent in 2016 before recovering to 1.6 percent growth in 2017. Recurrent growth disappointments point to lower potential growth, underscoring the need for structural reforms to boost productive capacity, but these will take time to bear fruit. Exchange rate flexibility has served the region well and, with shifting global trends, should continue to serve as the first line of defense against adverse shocks. In many cases, the need for a contractionary monetary policy stance is no longer evident, with inflation and inflation expectations returning to target levels. With risks still on the downside, countries should use the improved global financial environment to rebuild their fiscal buffers while preserving critical capital expenditures and social outlays. Uncertainty concerning the duration of easy global financial conditions poses risks for the region, while financial and corporate sector vulnerabilities bear closer monitoring.Español
Western Hemisphere region - Managing Transitions and RisksDate: April 2016With the global economy still struggling, many countries in Latin America and the Caribbean are facing a harsher world than they did just a few years ago. The growth outlook is weaker in advanced and emerging economies alike, while the gradual slowdown and rebalancing of economic activity in China is likely to keep commodity prices lower for longer. Meanwhile, favorable external financial conditions over the past several years have become more volatile, and risks of a sudden tightening are on the rise.
Against this backdrop, economic activity in Latin America and the Caribbean has been revised downward, compared with our January update and is likely to contract for a second consecutive year in 2016. But the growth outlook varies substantially within the region. While external conditions have placed a large drag on all commodity exporters, countries expected to post negative growth will do so mainly because of domestic imbalances and rigidities at home, and, in certain cases, temporary impact of policies designed to transition away from earlier distortions.
But the news isn't all bad. In the rest of the regionâand particularly where policy frameworks have been strengthened over the past two decadesâa relatively smooth adjustment continues. Given these broad contours, growth stories vary between the south and north.Español
Western Hemisphere regionDate: October 2015Economies in the Western Hemisphere are generally seeing a slowdown in growth. The U.S. economy regained momentum after a slow start at the beginning of the year, while in Latin America and the Caribbean economic activity continues to decelerate at the regional level. Stronger U.S. growth should benefit countries in the region, especially those with tighter links through trade, remittances, and tourism (Mexico, Central America, and the Caribbean). Weaker commodity prices for the foreseeable future, however, will continue to hurt South Americaâs net commodity exportersâlowering national incomes, reducing investment, and worsening fiscal balances. These developments could, in turn, impede progress made in recent years in poverty reduction. Key risks, including an abrupt tightening of U.S. interest rates or a further slowdown in China, may disproportionately affect Latin America. Chapters in this report examine monetary policy in Latin America, including the regionâs exposure to global financial shocks; the role of value chains and regional trade agreements in fostering trade integration; and the state of financial market development in the region.Español
Western Hemisphere region: Northern Spring, Southern ChillsDate: April 2015The economic outlook for Latin America and the Caribbean remains very challenging. Regional growth is projected to decline for a fifth consecutive year in 2015, dipping below 1 percent. Weakness is concentrated among South America's commodity exporters, where falling global commodity prices have compounded country-specific challenges. Meanwhile, growth is projected to be steady or stronger for most of the Caribbean, Central America, and Mexico, supported by lower oil bills for importers and robust economic recovery in the United States. The analysis in this report examines core challenges facing the region: the impact of lower commodity prices on fiscal and external positions, the drivers of the slowdown in investment, and the role of economic diversification for longer-term growth prospects.中文 Español português
Western Hemisphere region: Coping with Challenging TimesDate: October 2014Growth in Latin America and the Caribbean (LAC) has slowed down more than anticipated, as weak dynamics in South America have outweighed an incipient recovery in Mexico. Lower-than-expected external demand and softer terms of trade explain some of the weakness, but domestic supply-side bottlenecks and policy uncertainties have also weighed on confidence and private demand in several economies. Notwithstanding the projected pick-up in activity over the period ahead, growth is projected to be as low as 1.3 percent in 2014 and 2.2 percent in 2015. Spare capacity remains limited, however, underscoring the urgency of supply-side reforms to boost productivity and potential growth. Monetary policy and exchange rate flexibility should continue to serve as the first line of defense against adverse shocks, while a looser fiscal stance is unwarranted in most countries, especially those with weak public finances. Financial sector risks bear close monitoring, as the confluence of lower growth, rising U.S. interest rates, and geopolitical tensions could pose a considerable challengeEspañol
Western Hemisphere regionDate: April 2014Growth across Latin America and the Caribbean is expected to remain subdued at 2 1/2 percent in 2014. The firming recovery in the advanced economies will support export activity, but this positive impulse is likely to be offset in many countries by the impact of lower commodity prices, tighter external financing conditions, and domestic supply bottlenecks. Renewed volatility in financial markets and a sharper-than-expected decline in commodity prices represent distinct downside risks. Faced with these challenges, policymakers should seek to preserve credible policy frameworks and ensure sufficient buffers to cope with adverse shocks. For fiscal policy, a neutral to tighter stance will be appropriate in most countries, while exchange rate flexibility and proactive supervision of the financial system should serve as the principal defenses against external volatility. To boost medium-term growth prospects, further efforts are needed to raise infrastructure investment, improve educational outcomes, and enhance the business environment.Español
Regional Economic Outlook Update: Western HemisphereDate: October 2013Growth in Latin America and the Caribbean (LAC) remains in low gear, reflecting a less supportive external environment and, in some cases, domestic supply-side constraints. The region's output is projected to expand by 2 3/4 percent in 2013, with domestic demand remaining the main driver. The growth rate is expected to edge up to 3 percent in 2014 as external demand strengthens gradually, but will remain below the average growth rate of the last decade. In countries with low inflation and anchored inflation expectations, monetary policy should be the first line of defense if downside risks to the baseline materialize. Fiscal consolidation remains appropriate for countries with tight capacity constraints or limited fiscal space; it will also help constrain the continued widening of current account deficits. Safeguarding financial stability is a key priority in an environment of tighter global financial conditions and increased asset price volatility.Español
Western Hemisphere regionDate: May 2013Growth in Latin America is set to pick up to about 3Â½ percent in 2013, broadly in line with potential. The region continues to benefit from favorable external financing conditions and relatively high commodity prices, but these tailwinds are unlikely to last forever. The key challenges for policymakers today are preserving macroeconomic and financial stability, and building strong foundations for sustained growth in the future. More prudent fiscal policy would help ease pressure on capacity constraints, mitigate the widening of current account deficits, and prepare the economies better to deal with adverse external shocks. Exchange rate flexibility and prudential measures should continue to be used to discourage speculative capital flows. Sustaining strong output growth will require structural reforms to raise productivity growth.Español
Western Hemisphere regionDate: October 2012Growth in the Latin America and Caribbean (LAC) region has softened since our April report, reflecting the larger-than-anticipated impact of earlier policy tightening and the somewhat less favorable external environment. Global downside risks have increased, as the crisis in Europe continues to simmer, and the U.S. fiscal cliff looms. Nevertheless, with slack in many countries limited, and the twin tailwinds of external finance and commodity prices still stimulative, policies need to be carefully calibrated to keep domestic demand and credit growth in check. The key task for many countries remains to strengthen the resilience of their economies by rebuilding fiscal buffers and safeguarding financial stability. Challenges are more pressing in some countries, particularly those in the Caribbean, where the recovery has been held back by weak balance sheets and external demand.Español
Regional Economic Outlook: Western HemisphereDate: April 2012Growth in much of Latin America remains solid, although it slowed during the second half of 2011 as result of the combined effects of policy tightening and global uncertainties. Under our baseline, we expect growth in Latin America and the Caribbean to moderate to about 3¾ percent in 2012, from about 4½ last year. For many countries, high commodity prices and easy external financing conditions will provide tailwinds. For others, weak growth in the United States and other advanced-country partners, or homegrown fiscal problems, will hold back activity. This edition of the Regional Economic Outlook: Western Hemisphere elaborates on three key themes. First, the global economic environment is somewhat better than in late 2011, but remains risky as renewed tensions from Europe and the likelihood of an oil price shock cannot be discarded. Second, external conditions will remain stimulative for much of Latin America: The double tailwinds of easy external finance and high commodity prices are likely to persist for a while, though not forever. 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. This edition also expands on these themes through analytical features on regional spillovers, the growth effects of global financial shocks, and housing and mortgage markets in the region.Español
Regional Economic Outlook: Western HemisphereDate: October 2011Despite the recent deterioration in the global economic environment, projections for the region involve only a modest worsening of the outlook. The October 2011 Regional Economic Outlook: Western Hemisphere cautions, however, that there are severe downside risks. 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. With global monetary policy likely to remain accommodative, capital flows could exacerbate overheating and amplify vulnerabilities in emerging markets. Countries with strong real linkages to the United States face a somewhat weaker outlook and should give priority to reducing public debt. Although much of the Caribbean is recovering from a prolonged recession, the outlook remains constrained by high public debt and weak tourism flows. This issue finds that policies can play an important role in mitigating the economic impact of terms-of-trade shocks, and underscores the need to rebuild policy buffers.Español
Regional Economic Outlook: Western HemisphereDate: April 2011The theme of this issue of the Regional Economic Outlook: Western Hemisphere, "Watching out for Overheating," reflects risks for much of the region from rising inflation, strong domestic demand resulting in widening current account deficits, and strong credit and asset price growth. A dual outlook for the global economy, in which growth in emerging economies continues to outstrip growth in advanced economies, has implications for policy challenges facing emerging market economies in the region. And in the Caribbean, where public debt is high, fiscal policy will need to be consolidating, to ensure macro stability and set the stage for future growth. For all countries, rising global commodity prices, especially that of food, threaten social safety networks for the most vulnerable populations.Español
Regional Economic Outlook: Western HemisphereDate: October 2010"Heating Up in the South, Cooler in the North" broadly describes the economic scene for the Western Hemisphere. The report emphasizes how a mixed environment--with slow recovery in the United States and other advanced economies, but strength in Asia--differently shapes the outlooks for the diverse economies of Latin America and the Caribbean. This issue also focuses on financial issues in Latin America, with a chapter on the challenges of allowing credit to expand safely, without creating excessive risks, and a chapter that looks at macroprudential financial policies--topics especially important in today's context of low global interest rates and capital flows to emerging economies. The final chapter turns to Caribbean economies, exploring the drivers, and obstacles, that affect their growth.Español
Regional Economic Outlook: Western HemisphereDate: May 2010A multispeed global recovery is under way, with some emerging markets in the lead and the major advanced economies growing more slowly. This macroeconomic setting has brought a return to easy global financial conditions and high commodity prices--a situation likely to be sustained for some time but unlikely to be permanent. Against that external backdrop, the recovery in the Latin America and Caribbean region overall is advancing faster than anticipated, but moving at different speeds across countries. The report discusses the varying policy challenges that different countries face as the global recovery proceeds. Chapter 1 analyzes the global setting and the outlook for the United States and Canada in particular, while Chapter 2 focuses on the outlook for Latin America and the Caribbean. Chapter 3 looks in depth at the challenges arising from the return of easy external financial conditions. Together with high commodity prices, such conditions represent favorable "tailwinds" for many countries of the region, but also carry risks for policymakers to address.Español
Regional Economic Outlook: Western HemisphereDate: October 2009The impact of the global financial crisis and recession on the Latin America and Caribbean region was substantial, but the worst is over for most countries. The region avoided falling into a crisis of its own, performing relatively well amid strong external shocks. Many countries have now returned to growth. The region now faces the challenge of adapting to a new global environment that will not be as favorable as in the past. The latest edition of the report explores the lessons and policy agenda emerging from the recent performance of the Latin America and Caribbean region, drawing also on the broader international experience. Published biannually in May and October.
Regional Economic Outlook: Western HemisphereDate: May 2009The global crisis that began in advanced economies has sent severe shocks around the world, posing a test to the economies of Latin America and the Caribbean. The good news is that during this decade the region has made itself more resilient to external shocks, by strengthening policy frameworks and reducing vulnerabilities in its public finances and financial systems. These preparations, the report shows, mean that countries are now more able to respond to the external crisis, many for the first time, with active policies to boost output and employment and protect the most vulnerable groups. This will help contain the damage from the global crisis and speed up the region's recovery.
Regional Economic Outlook: Western HemisphereDate: October 2008The ongoing global turmoil represents a confluence of negative shocks for Latin America and the Caribbean: a freeze in global credit markets, weaker external demand, and lower commodity prices. But the region is expected to deal with these global shocks better than in previous crises, reflecting progress made in improving macroeconomic fundamentals over the past decade. Still, there are a number of downside risks going forward. Against this uncertain background, the report discusses the implications of the global financial crisis for the regional outlook and the corresponding challenges facing policymakers.
Regional Economic Outlook: Western HemisphereDate: April 2008The main focus of this report is the outlook for the region in the face of the downturn now projected for the U.S. economy and the continuing risks that affect the global outlook. Overall the region is better placed than in the past to navigate the current financial turbulence, given reduced vulnerabilities and stronger policy frameworks. Nonetheless, the report points to risks that the global financial stress could curtail capital flows to the region and world commodity prices could fall more than expected. There are also risks arising from rising inflation and rapid private credit growth in a number of countries. The report then explores the policy options facing governments in the region, underscoring the need to preserve the gains of recent years.Español
Regional Economic Outlook: Western HemisphereDate: November 2007In spite of a slower U.S. economy and recent market turbulence, growth in the Latin America and Caribbean region has continued at a robust pace. This reports explores the resilience of the LAC region to external shocks and the policy challenges involved in sustaining the region's improved fundamentals. The analysis focuses, in particular, on real and financial linkages with the United States, the strength of underlying fiscal positions, and the sustainability of the ongoing credit boom.Español português
Regional Economic Outlook: Western HemisphereDate: April 2007The past year has been one of strong economic performance for the Western Hemisphere, notwithstanding somewhat slower growth in the United States in recent quarters. Can this performance be sustained, and what challenges does the region face? Reviewing macroeconomic prospects and risks, this report pays particular attention to the influence of the external environment on Latin America, and addresses the question of whether Latin America has now succeeded in breaking with its history of periodic growth reversals.
Regional Economic Outlook: Western HemisphereDate: November 2006This report provides the IMF's latest views on recent developments and prospects for the region, discusses potential risks to the forecast, and describes key policy challenges.Español
Regional Economic Outlook: Western Hemisphere, 2006 Midyear UpdateDate: April 2006This provides a midyear update on recent economic developments and prospects for countries in the region. The update describes policy developments that have helped underpin the region's recent favorable economic performance and also discusses the key challenges that policymakers will face in managing vulnerabilities, fostering growth and poverty reduction, while maintaining macroeconomic stability.