## Regional Economic Outlook—Western Hemisphere (text extract)

## Source details

**Canonical URL:** [Regional Economic Outlook—Western Hemisphere (text extract)](https://www.imf.org/-/media/files/publications/reo/whd/2024/october/english/text.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/reo/whd/2024/october/english/text.pdf.md)
- [Structured JSON version](/-/media/files/publications/reo/whd/2024/october/english/text.pdf.json)

---

### Global Economic Environment
- Global growth: "expanded by 3.3 percent in 2023 and is expected to grow at a similar pace in 2024 and 2025."
- United States growth: "expected to remain strong at 2.8 percent in 2024 and slow to 2.2 percent in 2025."
- Euro area growth: "expected to accelerate to 0.8 percent in 2024 (from 0.4 percent in 2023) and increase to 1.2 percent in 2025."
- China growth: "5.2 percent in 2023 and projected to slow to 4.8 percent in 2024 and 4.5 percent in 2025."
- Medium-term world growth: "projected to expand by 3.2 percent annually during 2025–29."
- Inflation and financial conditions:
  - Global disinflation overall; inflation in advanced economies running near targets driven by disinflation in core goods prices while services inflation remains high.
  - US long-term yields: "have recently declined amid incipient labor market weakening and the start of the easing cycle by the US Federal Reserve, although they remain elevated."
  - Financial conditions: "despite high US interest rates, broad financial conditions remain accommodative due to buoyant corporate valuations in the United States."
  - Commodity prices: "prices of key commodities for the Latin America and the Caribbean (LAC) region have softened over the last year."

### Latin America and the Caribbean: Recent Developments
- Regional growth (excluding Argentina and Venezuela): "moderated from 4.0 percent in 2022 to 2.6 percent in 2023, and recorded a similar pace in early 2024 as most economies operate near potential."
- LA7 group growth: "slowed from 3.6 percent in 2022 to about 2.4 percent in 2023 and 2.0 in the first half of 2024."
- Country-level snapshots:
  - Mexico: "growth moderated amid a positive output gap, partly because of weak external demand and tight policies to combat inflation."
  - Brazil: "growth remained robust and is operating above potential."
  - Chile and Colombia: "growth strengthened after post-overheating declines."
  - Peru and Uruguay: "economic activity rebounding after normalization of weather conditions..., helping to close negative output gaps."
  - Paraguay: "growth remained robust, continuing the rebound from the 2022 drought."
- Inflation and labor markets:
  - Inflation: "fallen considerably and is near target in most countries but shows stickiness due mainly to still-strong domestic labor markets."
  - Labor markets: "still-strong domestic labor markets are contributing to persistent services inflation and inflation stickiness."

### Outlook and Risks
- Growth outlook:
  - Regional: "growth is expected to moderate in late 2024 and 2025, with risks around the baseline mostly tilted to the downside."
  - LAC (excluding Argentina and Venezuela): growth "expected to moderate from 2.6 percent in 2023–24 to 2.2 percent in 2025."
- Inflation outlook:
  - "Projected to continue easing gradually and converge to central banks’ targets by 2026 in most cases."
  - Risks to inflation: "tilted to the upside" from tight labor markets, persistent services inflation, incomplete re-anchoring of inflation expectations, and fiscal slippages.
- Additional risks:
  - External: tighter-than-expected US monetary policy; commodity price volatility; broad financial and geopolitical developments affecting capital flows and trade.
  - Domestic: policy uncertainty and social tensions impeding reform implementation.
  - Caribbean: "downside risks dominate due to climate-related shocks and weaker tourism demand."

### Policy Recommendations
- Rebalancing the policy mix:
  - Fiscal consolidation: "advance without delay, with emphasis on revenue mobilization, to rebuild buffers while protecting priority public investment and social spending."
  - Monetary policy: "most central banks are well placed to proceed with monetary easing, striking a balance between fending off reemerging price pressures and avoiding an undue economic contraction."
  - Credibility and resilience: "durable return of inflation to target will help public debt dynamics and strengthen credibility of policy frameworks."
- Structural reforms to boost potential growth:
  - Improve governance: "strengthen the rule of law, enhance government effectiveness, and tackle crime."
  - Boost capital accumulation: "improve the business environment, foster competition, and increase international trade."
  - Public investment: "increase and make more effective public investment to support growth."
  - Labor market policies: "tackle informality and make formal labor markets more flexible, including to adapt to new technologies."
  - Female labor participation: "increase female labor participation to help boost the labor force and offset demographic shifts."
  - Climate and green transition: "address climate change and embrace the green transition while strengthening investment frameworks to attract capital and raising natural-resource revenues to attend social and public investment needs."
- Fiscal policy specifics:
  - Implement "ambitious fiscal plans without further delays and underpin them with identified fiscal measures."
  - Focus on "growth-friendly revenue mobilization" and protect "growth-enhancing public investment and key social spending."
  - Strengthen fiscal rules: "link stricter fiscal rules to operational targets and medium-term budget frameworks" and introduce debt anchors.
- Monetary policy guidance:
  - "With inflation generally within the target range in most countries, monetary policy should continue easing while remaining on guard" because policy rates "stand above levels implied by standard Taylor-rule estimates" and market expectations point to higher terminal rates for the easing cycle.

### Structural Reform Scenarios and Medium-Term Prospects
- Structural reform impact: "closing the region’s structural reform gaps by half in governance, business regulation, and external sector could lift output by up to 8 percent in the short term and 12 percent in the medium term."
- Medium-term growth prospects:
  - LAC (excluding Argentina and Venezuela): "projected to expand at about 2½ percent per year over the next five years—aligned with the region’s low historical average and low relative to other emerging market economies."
  - Drivers: "Total factor productivity, capital stock, and labor contributions"—with productivity and capital accumulation weak and the labor force growth slowing as the demographic dividend fades.

### Country Focus: Selected Projections and Policy Notes
- Argentina:
  - GDP: "after contracting by about 3.5 percent this year, projected to expand by about 5 percent in 2025."
  - Inflation: "annual inflation projected to end the year below 140 percent before dropping to about 45 percent by the end of 2025."
- Brazil:
  - Growth: "projected to remain robust at 3.0 percent in 2024" and "moderate to 2.2 percent in 2025."
  - Medium-term: "growth expected to strengthen to 2.5 percent."
- Bolivia:
  - Growth: "deceleration from 3.1 in 2023 to 1.6 percent in 2024."
  - Inflation: "expected to reach 6 percent in the end of 2024 and average about 4 percent thereafter."
- Chile:
  - Growth: "projected at 2.5 and 2.4 percent in 2024 and 2025, respectively."
  - Inflation: "convergence to the central bank’s 3 percent target now expected only by the first half of 2026."
- Colombia:
  - Growth: "expected to pick up to 1.6 percent in 2024 and 2.5 in 2025."
  - Inflation target path: "bring inflation to below 6 percent by the end of 2024 and inside the 2- to 4-percent target band by the end of 2025."
- Ecuador:
  - Growth: "projected to slow to 0.3 percent in 2024 and 1.2 percent in 2025."
  - Inflation: "projected to reach 2.8 percent by the end of 2024 ... before declining to 1.7 percent in 2025."
- Mexico:
  - Growth: "about 1.5 percent in 2024" and "1.3 percent in 2025."
  - Policy need: 2025 budget "needs to provide a credible consolidation plan."
- Paraguay:
  - 2023 growth: "4.7 percent"; inflation stabilized "around the 4-percent central bank target."
  - Fiscal: deficit "rose to 4.1 percent of GDP in 2023"; consolidation underway to comply with the 1.5 percent of GDP limit by 2026.
- Peru:
  - Growth: "rebounding after contracting in 2023"; headline inflation "already at the midpoint of the 1 to 3 percent target range."
- Uruguay:
  - Growth: "rebound to 3.2 percent in 2024 and 3 percent in 2025."
  - Inflation: "projected to pick up in H2 2024 but stay within the 3- to 6-percent target range."
- Venezuela:
  - Growth: "expected to grow at 3 percent in 2024."
  - Inflation: "projected at 60 percent by the end of 2024."
  - Humanitarian context: "about 7.8 million people (25 percent of the population) leaving the country since 2014."

### Appendix: Key Indicators (selected exact figures)
- Regional growth and inflation highlights:
  - Global growth: "3.3 percent" (2023).
  - World economy: "3.2 percent annually during 2025–29".
  - LAC (excluding Argentina and Venezuela): Real GDP Growth 2022 = "4.0 percent"; 2023 = "2.6 percent"; 2024 = "2.6 percent"; 2025 = "2.2 percent".
  - LA7: Real GDP Growth 2022 = "3.6 percent"; 2023 = "2.4 percent"; 2024 = "2.4 percent"; 2025 = "2.0 percent". End-of-period Inflation 2024 = "4.4"; 2025 = "3.3".
  - Latin America and the Caribbean (Memorandum): Real GDP Growth 2021 = "7.4"; 2022 = "4.2"; 2023 = "2.2"; 2024 = "2.1"; 2025 = "2.5".
  - End-of-period Inflation (Latin America and the Caribbean, Memorandum): 2021 = "11.7"; 2022 = "14.9"; 2023 = "17.2"; 2024 = "13.2"; 2025 = "6.9".
- Appendix Table 1 (selected country-year values):
  - United States Real GDP Growth: 2023 = "2.9", 2024 = "2.8", 2025 = "2.2".
  - Brazil Real GDP Growth: 2023 = "2.9", 2024 = "3.0", 2025 = "2.2".
  - Mexico Real GDP Growth: 2023 = "3.2", 2024 = "1.5", 2025 = "1.3".
  - Argentina Real GDP Growth: 2023 = "–1.6", 2024 = "–3.5", 2025 = "5.0".
  - Guyana Real GDP Growth: 2023 = "33.0", 2024 = "43.8", 2025 = "14.4".
- Appendix Table 2 (selected fiscal indicators):
  - Latin America and the Caribbean (Memorandum) General Government Gross Debt: 2021 = "70.5", 2022 = "68.0", 2023 = "73.9", 2024 = "69.4", 2025 = "69.8".
  - General Government Primary Balance (Latin America and the Caribbean, Memorandum): 2021 = "–0.6", 2022 = "0.3", 2023 = "–0.8", 2024 = "–0.4", 2025 = "0.2".
  - North America General Government Gross Debt: 2021 = "120.1", 2022 = "114.2", 2023 = "113.9", 2024 = "116.1", 2025 = "118.9".
- Data coverage note: "Data in this table have been compiled based on information available through October 7, 2024."

*International Monetary Fund. Regional Economic Outlook—Western Hemisphere. October 2024 (text extract).*

### references.

### References

### Global Economic Environment
- Global growth: expanded by 3.3 percent in 2023 and is expected to grow at a similar pace in 2024 and 2025.
- United States growth: expected to remain strong at 2.8 percent in 2024 and slow to 2.2 percent in 2025.
- Euro area growth: expected to accelerate to 0.8 percent in 2024 (from 0.4 percent in 2023) and increase to 1.2 percent in 2025.
- China growth: 5.2 percent in 2023 and projected to slow to 4.8 percent in 2024 and 4.5 percent in 2025.
- Medium-term world growth: projected to expand by 3.2 percent annually during 2025–29.
- Global disinflation: continued overall, with inflation in advanced economies (United States, euro area) currently running near targets driven by disinflation in core goods prices; services inflation remains high.
- US long-term yields: have recently declined amid incipient labor market weakening and the start of the easing cycle by the US Federal Reserve, although they remain elevated.
- Financial conditions: despite high US interest rates, broad financial conditions remain accommodative due to buoyant corporate valuations in the United States.
- Commodity prices: prices of key commodities for the Latin America and the Caribbean (LAC) region have softened over the last year.

### Latin America and the Caribbean: Recent Developments
- Regional growth (excluding Argentina and Venezuela): moderated from 4.0 percent in 2022 to 2.6 percent in 2023, and recorded a similar pace in early 2024 as most economies operate near potential.
- LA7 group growth: slowed from 3.6 percent in 2022 to about 2.4 percent in 2023 and 2.0 in the first half of 2024.
- Country-level developments:
  - Mexico: growth moderated amid a positive output gap, partly because of weak external demand and tight policies to combat inflation.
  - Brazil: growth remained robust and is operating above potential, reflecting strong labor markets and smaller-than-anticipated disruptions from the floods.
  - Chile and Colombia: growth strengthened after post-overheating declines, helping close positive output gaps.
  - Peru and Uruguay: economic activity rebounding after normalization of weather conditions (exceptional rainfalls in Peru and droughts in Uruguay), helping to close negative output gaps.
  - Paraguay: growth remained robust, continuing the rebound from the 2022 drought and helping close the negative output gap.
- Inflation dynamics: inflation has fallen considerably and is near target in most countries but shows stickiness due mainly to still-strong domestic labor markets.
- Labor markets: still-strong domestic labor markets are contributing to persistent services inflation and inflation stickiness.

### Outlook and Risks
- Growth outlook: growth is expected to moderate in late 2024 and 2025, with risks around the baseline mostly tilted to the downside.
- Inflation outlook: projected to continue easing gradually and converge to central banks’ targets by 2026 in most cases.
- Risks to inflation: tilted to the upside and stem from tight labor markets, persistent services inflation, incomplete re-anchoring of inflation expectations, and fiscal slippages.
- Medium-term growth prospects: expected to remain close to low historical averages, reflecting long-standing challenges including low investment and productivity growth and shifting demographics.
- Additional risks and regional dynamics: commodity price softness reduces support to economic activity in the region; broad financial and geopolitical developments may influence capital flows and trade patterns.

### Policy Recommendations
- Rebalancing the policy mix:
  - Fiscal consolidation: advance without delay, with emphasis on revenue mobilization, to rebuild buffers while protecting priority public investment and social spending.
  - Monetary policy: most central banks are well placed to proceed with monetary easing, striking a balance between fending off reemerging price pressures and avoiding an undue economic contraction.
  - Credibility and resilience: durable return of inflation to target will help public debt dynamics and strengthen credibility of policy frameworks.
- Structural reforms to boost potential growth:
  - Improve governance: strengthen the rule of law, enhance government effectiveness, and tackle crime.
  - Boost capital accumulation: improve the business environment, foster competition, and increase international trade.
  - Public investment: increase and make more effective public investment to support growth.
  - Labor market policies: tackle informality and make formal labor markets more flexible, including to adapt to new technologies.
  - Female labor participation: increase female labor participation to help boost the labor force and offset demographic shifts.
  - Climate and green transition: address climate change and embrace the green transition while strengthening investment frameworks to attract capital and raising natural-resource revenues to attend social and public investment needs.

### Key Statistics and Figures Cited
- Global growth: "3.3 percent" (2023).
- US growth: "2.8 percent" (2024) and "2.2 percent" (2025).
- Euro area growth: "0.8 percent" (2024), "0.4 percent" (2023), and "1.2 percent" (2025).
- China growth: "5.2 percent" (2023), "4.8 percent" (2024), "4.5 percent" (2025).
- World economy: "3.2 percent annually during 2025–29".
- LAC growth (excluding Argentina and Venezuela): "4.0 percent" (2022) to "2.6 percent" (2023).
- LA7 growth: "3.6 percent" (2022), "2.4 percent" (2023), and "2.0" (first half of 2024).
- Convergence of inflation to central banks’ targets: "by 2026 in most cases".
- Report coverage cut-off: projections and developments available through "October 7, 2024".

*International Monetary Fund. Regional Economic Outlook—Western Hemisphere. October 2024.*

### 2. United States: Financial Conditions Index and 10-Year

### 2. United States: Financial Conditions Index and 10-Year Government Bond Yield

### Recent Economic Developments (LA7 and LAC overview)
- Growth has moderated across the region, with heterogeneous country outcomes.
- LA7 (Brazil, Chile, Colombia, Mexico, Paraguay, Peru, Uruguay):
  - Growth increasingly reliant on consumption amid stagnant investment (except Mexico) and flat export volumes.
  - Employment is back to pre-pandemic trend; unemployment at historically low levels, especially in Brazil and Mexico.
  - Real wage growth has remained strong, outpacing productivity and contributing to price pressures, especially in services.
- CAPDR (Central America, Panama, and the Dominican Republic):
  - Growth remained robust in early 2024—supported by strong remittance-fueled consumption (El Salvador, Guatemala, Honduras) and robust exports (Costa Rica, the Dominican Republic, and Panama).
- Caribbean (excluding Guyana):
  - Growth is slowing as the post-pandemic tourism rebound fades after reaching pre-pandemic levels.

### Trade Patterns and Capital Flows
- United States remains the main export destination, with a broadly stable share of about half of all LA7 exports (over 80 percent in the case of Mexico).
- China’s share of LA7 merchandise trade:
  - Grew from about 10 percent pre-2017 to about 15 percent in recent years.
  - Increase continues a long-term trend of rising trade intensity with China.
- Harmful (trade-distorting) trade interventions by systemic economies have increased since 2017, but:
  - The region’s structure of trade flows and trade policies have not materially changed.
  - Comparable policy actions by LAC countries have been limited, contributing to a lower prevalence of trade-distortive policies in LAC relative to other emerging market or advanced economies.
- Capital flows:
  - FDI remains dominant and patterns broadly unchanged; United States and advanced European countries are main counterparts in FDI.
  - Data on China’s investments in the region are incomplete.

### Inflation and Monetary Conditions
- Headline and core inflation have been receding in the region since mid/end of 2022.
- Headline inflation:
  - Running within the target range in recent months in most LA7 economies (except in Colombia and Mexico), but not yet at the mid-point of the range.
- Disinflation drivers:
  - Unwinding of earlier rise in noncore goods prices (food and energy).
  - Appreciating domestic currencies (though some recent reversal).
- Core inflation, especially services inflation:
  - Has remained elevated partly because of still-high wage growth and incomplete re-anchoring of inflation expectations.
- Imported inflation and producer price inflation trends have contributed to the disinflation process.

### Financial Soundness
- Domestic financial conditions have remained tight since 2022 due to contractionary monetary policy.
- Banks:
  - Generally liquid, well capitalized, and with low levels of nonperforming loans.
  - Profitability indicators broadly stable on average, supported by rising net interest margins.
  - Dispersion of profitability indicators has widened, indicating potential pockets of balance sheet weakness.
- Corporates:
  - Corporate profitability generally in line with pre-pandemic levels.
  - Corporate liquidity and indebtedness indicators reported (figures in Figure 6; markers are medians across corporations of Brazil, Chile, Colombia, Mexico, and Peru).

### Outlook and Projections (selected figures from Table 1)
- LAC (excluding Argentina and Venezuela):
  - Growth expected to moderate from 2.6 percent in 2023–24 to 2.2 percent in 2025.
  - End-of-period inflation projected to decline from 4.7 percent at end-2023 to 4.3 percent (end-2024) and 3.3 percent (end-2025).
- Table 1 highlights (regional and group projections and differences from April 2024 WEO):
  - Latin America and the Caribbean: Real GDP Growth 2022 = 4.2; 2023 = 2.2; 2024 = 2 .1; 2025 = 2.5; End-of-period Inflation 2024 = 13. 2; 2025 = 6.9.
  - LA7: Real GDP Growth 2022 = 3.6; 2023 = 2.4; 2024 = 2.4; 2025 = 2.0; End-of-period Inflation 2024 = 4.4; 2025 = 3.3.
  - Other South America: Real GDP Growth 2022 = 5.6; 2023 = – 0 .1; 2024 = –1.8; 2025 = 4.0; End-of-period Inflation 2024 = 95.5; 2025 = 33.5.
  - CAPDR: Real GDP Growth 2022 = 5.4; 2023 = 4 .1; 2024 = 3.8; 2025 = 3.8; End-of-period Inflation 2024 = 3.0; 2025 = 3.3.
  - Caribbean: Real GDP Growth 2022 = 13 .1; 2023 = 7. 5; 2024 = 11.9; 2025 = 5.5; End-of-period Inflation 2024 = 7. 2; 2025 = 6 .1.
  - Memorandum LAC excluding Argentina/Venezuela: Real GDP Growth 2022 = 4.0; 2023 = 2.6; 2024 = 2.6; 2025 = 2.2; End-of-period Inflation 2024 = 4.3; 2025 = 3.3.
- Country group notes:
  - Within LA7, Mexico projected to decelerate markedly in 2024 and 2025 partly reflecting capacity constraints, fiscal consolidation, and lower growth in the United States.
  - Brazil’s growth projected to remain broadly unchanged in 2024 before slowing in 2025.
  - Chile, Colombia, Peru, and Uruguay expected to accelerate somewhat in 2024 and 2025 after a weak 2023.
  - Other South American economies (Argentina, Bolivia, Ecuador, and Venezuela) projected to contract as a group in 2024 but rebound in some in 2025 due to stabilization efforts.

### Risks and Balance of Risks
- Growth risks:
  - Generally tilted to the downside, especially in the Caribbean where downside risks dominate due to climate-related shocks and weaker tourism demand.
  - External downside risks across the region include tighter-than-expected US monetary policy and greater commodity price volatility.
  - Domestic downside risks include policy uncertainty and social tensions that could hinder policy and reform implementation.
  - Upside growth risks: stronger trading-partner growth, more benign global environment, pick-up in investment (green minerals, energy, nearshoring).
- Inflation risks:
  - Mostly tilted to the upside, with heterogeneity across subregions.
  - Sources: persistent services inflation, still-tight labor markets, risk of fiscal slippages, relative price adjustments between core goods and services, US dollar appreciation, higher commodity prices, escalation of global trade tensions.

### Medium-Term Growth Prospects
- LAC (excluding Argentina and Venezuela) medium-term outlook:
  - Projected to expand at about 2½ percent per year over the next five years—aligned with the region’s low historical average and low relative to other emerging market economies.
  - Average income per capita projected to rise only marginally, implying limited progress in reducing the income gap with advanced economies.
- Drivers highlighted:
  - Total factor productivity, capital stock, and labor contributions are presented in Figure 8 (decomposition by sector and demographic factors).

*Source: October 2024 • INTERNATIONAL MONETARY FUND, Regional Economic Outlook—Western Hemisphere (text extract).*

### 1. Contributions to Real GDP Growth

### 1. Contributions to Real GDP Growth

### Growth drivers and outlook
- Medium-term growth is expected to remain low because of stagnant productivity and slow capital accumulation, "...perpetuating the region’s income gap with advanced economies."
- The growth of the labor force will slow as population growth decelerates and the “demographic dividend” fades.
- Prospects for capital accumulation are also tepid; investment is expected to remain near historic low levels—and lower than in other emerging market economies—partly reflecting low public investment.
- Total factor productivity growth is projected to remain stagnant and low relative to peers, "...partly reflecting the increased concentration of investment in lower productivity sectors."
- COVID-19 years (2020–21) are noted as atypical; data for these years are not shown for some panels.

### Regional composition and definitions
- LA7 = Latin America 7 (Brazil, Chile, Colombia, Mexico, Paraguay; Peru, Uruguay).  
  - Note: LA7 excludes Paraguay because of data limitations.  
  - Note: LA7 excludes Uruguay because of data limitations.
- EM Asia = India, Indonesia, Malaysia, the Philippines, Thailand, Vietnam.
- EM Europe = Bosnia and Herzegovina, Bulgaria, Hungary, Poland, Romania, Serbia.
- Aggregates are purchasing-power-parity (PPP) GDP-weighted averages; PPP refers to purchasing power parity.

### Key quantitative projections and comparisons
- Structural reform scenarios: closing the region’s structural reform gaps by half in governance, business regulation, and external sector could lift output by up to 8 percent in the short term and 12 percent in the medium term.
- Time periods and vintages cited: 2000–19, 2024–29, 2000–19, 2013–19, 2017–19, 2013–17, 2021–22, 2017:Q1–19:Q1, 2023:Q1–24:Q2, end of 2025, end of 2026.
- Figures and series referenced include: Real GDP (PPP) per capita, 2017 (thousands of US dollars); Real Capital Stock Growth (Percent); Public Gross Fixed Capital Formation (Percent of GDP; three-year moving average); General Government Gross Debt (Percent of GDP); General Government Primary Balance (Percent of GDP); Tax Revenue Collection (Percent of GDP).

### Policy recommendations — high level
- Rebalance the policy mix toward strengthening public finances and normalizing monetary policy to rebuild policy buffers and strengthen macroeconomic resilience.
- Press on with structural reforms to raise living standards; improving governance tops reform priorities (strengthen rule of law, tackle corruption and crime, enhance government effectiveness).
- Strengthen public finances through growth-friendly fiscal consolidation and timely withdrawal of pandemic stimulus; implement ambitious fiscal plans without further delays and underpin them with identified fiscal measures.
- Growth-friendly revenue mobilization is critical, with a focus on increasing personal income tax collection from currently low tax ratios.
- Protect growth-enhancing public investment and key social spending while creating fiscal space for front-loaded spending on climate policies and for lowering relatively high corporate income tax rates.
- Enhance fiscal rules and institutional frameworks: link stricter fiscal rules to operational targets and medium-term budget frameworks, prevent frequent relaxation of fiscal targets, and introduce debt anchors to give consolidation plans greater credibility and reduce high financing costs.
- Increase and make public investment more effective by strengthening public investment management, ensuring transparent and competitive project selection, clear funding mechanisms, and high economic and social returns.
- Improve the business environment and foster competition: reduce administrative burden and entry costs for firms, strengthen contract enforcement, address judicial delays, promote trade integration, and diversify away from commodities and low-tech products.
- Labor market reforms: tackle informality, make labor markets more flexible and inclusive, revise tax policies and employment protection legislation, address skill mismatches via vocational training and youth education, and increase female labor participation by improving childcare availability and affordability, eliminating asymmetries in parental benefits, and allowing more flexible work schedules.
- Industrial policy guidance: if used, ensure policies are time-bound, cost effective, transparent, and consistent with preserving macroeconomic stability and avoiding negative cross-border spillovers.
- Climate policies: implement mitigation and adaptation policies; invest in adaptation and green energy innovation; strengthen investment frameworks to attract capital and raise natural-resource revenues for social and public investment needs.

### Fiscal policy specifics and implementation priorities
- The region’s public finances withstood the pandemic better than expected, but public debt remains high and will increase further in the absence of additional fiscal consolidation.
- Most countries have ambitious plans for strengthening public finances and stabilizing debt at current levels; these plans should be implemented without further delays and with identified fiscal measures.
- Addressing spending inefficiencies can help strengthen public finances in the near term, but successful consolidation will require growth-friendly revenue mobilization.
- Strengthening fiscal frameworks is necessary because high compliance with fiscal rules did not prevent the pre-pandemic debt buildup; enhance frameworks to prevent repeat debt buildup and improve long-term credibility.

### Monetary policy stance and guidance
- Central banks in the region have moved forward with monetary easing ahead of other countries, particularly the United States.
- Policy rates have remained restrictive compared to past disinflation episodes, reflecting lingering inflation risks including from yet-to-be fully anchored inflation expectations.
- Current policy rates stand above levels implied by standard Taylor-rule estimates, reflecting tracking of the US policy rate due to concerns over narrower interest rate differentials affecting capital flows and domestic currencies.
- Market expectations point to terminal rates for this easing cycle that would be higher than historical averages; neutral rate estimates also suggest an increase over time, with greater estimation uncertainty.
- With inflation generally within the target range in most countries, monetary policy should continue easing while remaining on guard given elevated uncertainty and upside inflation risks.
- Future policy actions should balance fending off reemerging price pressures (from tight labor markets, yet-to-be fully anchored inflation expectations, and slippages in fiscal consolidation) and avoiding undue economic contraction.

*REGIONAL ECONOMIC OUTLOOK—Western Hemisphere; INTERNATIONAL MONETARY FUND • October 2024*

### 1. LA7: Macrostructural Reform Gaps, 2021–22

### 1. LA7: Macrostructural Reform Gaps, 2021–22

### Structural gaps and output impact
- Structural gaps are calculated as the deviation of each reform area from its frontier (best performer in the same year). Each reform indicator is normalized between 0 and 1 based on the sample.
- Governance refers to 2022, others are 2021. Markers indicate medians and whiskers interquartile ranges.
- Impact scenario reported: "Impact from reducing first-generation reform gaps relative to global frontier by half." Purchasing-power-parity GDP-weighted averages are reported.
- Output impact (reported in source figures):
  - Cumulative percent change (short-term and medium-term output) shown up to "14" (chart maximum) under the heading "Output Impact of First-Generation Reforms".
- Sample definitions and acronyms:
  - EMDEs = emerging market and developing economies.
  - LA7 = Latin America 7 (Brazil, Chile, Colombia, Mexico, Paraguay, Peru, Uruguay).

### LA7: Pro-Growth Reform Priorities and Reforms Underway (country-level priorities and ongoing reforms)
- Brazil
  - First Priority: Implement value-added tax reform and simplify tax system; Enhance fiscal framework, building on the fiscal rule; Implement ecological transformation plan to boost green growth.
  - Second Priority: Facilitate skill upgrade; Increase female labor force participation (for example, increase daycare services, implement pay transparency measures).
  - Third Priority: Reduce tariff and nontariff barriers to trade.
  - Reforms Underway: Implementation of value-added tax reform enacted in 2023.
- Chile
  - First Priority: Strengthen tax compliance; Strengthen public investment management.
  - Second Priority: Streamline the process of investment permit application; Strengthen security.
  - Third Priority: Continue to increase female labor participation (for example, by improving childcare).
  - Reforms Underway: Strengthening tax compliance; Reforming pension; Improving access to childcare; Streamlining investment permit process.
- Colombia
  - First Priority: Strengthen enforcement of legal frameworks on governance and transparency.
  - Second Priority: Reduce non-wage labor costs (employers’ social security contributions, payroll taxes, severance payments, and paid leave).
  - Third Priority: Reduce administrative burden on startups, ease regulations to promote firm entry/exit and a level playing field for private and public companies.
  - Product and credit market priorities and reforms underway: Eliminate barriers in service and network sectors and barriers to trade and investment; Ease small and medium-sized enterprises’ access to credit; Reduce nontariff barriers to trade; Strengthen trade infrastructure.
  - Additional reforms under discussion/underway: Pension reform; Tax reform to incentivize investments and green transition; Health care reform; Reducing informality; Granting greater remuneration and protection to formal employees.
- Mexico
  - First Priority: Non-oil revenue mobilization to finance infrastructure, health, and education spending needs.
  - Second Priority: Strengthen public investment management; Improve targeting of social protection programs.
  - Third Priority: Strengthen rule of law and control of corruption.
  - Product and market priorities: Enhance private participation in water and energy sectors; Deepen financial development and inclusion.
- Paraguay
  - First Priority: Reform tax policies (personal income tax); Institutional reforms to raise tax collection efficiency; Strengthen climate-public investment management and multiyear budgeting.
  - Second Priority: Improve government effectiveness in provision of public services; Strengthen control of corruption and rule of law.
  - Third Priority: Enhance benefits and better explanation of benefits (health care and unemployment) can make formal employment more attractive; Strengthen employment protection policies.
  - Product and credit market reforms under way: Public-private partnerships law to encourage private investment in infrastructure; Public sector retirement; Investment framework of pension funds; Electricity tariffs and operational/financial capacities of public electricity company; Bankruptcy framework allowing firms’ swifter exit.
- Peru
  - First Priority: Strengthen public investment management; Revise tax code to eliminate incentives for informality/firms to stay small; Enhance coverage and the funding of social spending.
  - Second Priority: Reduce political instability and violence/terrorism; Improve government effectiveness especially at the local level; Strengthen control of corruption and law enforcement.
  - Third Priority: Liberalize employment protection; Reduce non-wage labor costs; Reduce labor informality.
  - Reforms Underway: Revamping income tax regime for small companies to incentivize formalization.
- Uruguay
  - First Priority: Differentiate wage negotiation across sectors; Improve education to mitigate skills mismatch; Liberalize labor mobility and migration restrictions.
  - Second Priority: Ease access to credit, develop financial market; Reduce public ownership (state-owned enterprises); Strengthen competition policies/agency.
  - Third Priority: Eliminate nontariff barriers and enhance nontraditional services trade inside Mercosur; Strengthen port infrastructure and quality of roads; Reduce tariff on trade outside Mercosur.
  - Reforms Underway: Public expenditure efficiency reform; Refining fiscal rules; Continuing dedollarizaiton program; Modernizing payment system.

### Central America, Panama, and the Dominican Republic (CAPDR): GDP convergence and drivers
- Over the past 25 years, convergence of GDP per capita with the United States diverged within CAPDR:
  - Costa Rica, Panama, and the Dominican Republic (CPD) saw rapid convergence, comparable to East Asia and Central Europe and the Baltics.
  - Northern Triangle (El Salvador, Guatemala, and Honduras) and Nicaragua (NTN) saw very modest convergence.
- Differences in convergence reflect diverging labor productivity paths rather than employment-to-population changes:
  - In CPD, labor productivity increased relative to the United States.
  - In NTN, labor productivity declined relative to the United States.
- Growth drivers differed:
  - NTN: Growth mainly driven by consumption.
  - CPD: Investments (and exports) played an important role; per capita investment in CPD has quadrupled since 1970, whereas per capita investment in NTN is no higher now than it was in the 1970s (illustrated in Box Figure 1.3).
- Balance-of-payments and capital flows:
  - CPD saw a sharp rise in foreign direct investment (FDI) inflows.
  - NTN saw flat FDI inflows but stronger remittance inflows.
  - There is a clear positive link between cumulative FDI inflows and GDP per capita (Box Figure 1.4).
  - Remittances grew more strongly in NTN and supported consumption but did not boost GDP in NTN; higher remittances are not associated with higher GDP (Box Figure 1.5). The text notes a potential negative link between remittances and GDP growth, reflecting underlying factors (high crime and low governance) that boost emigration and reduce GDP growth.
- Policy implication: NTN needs to attract more FDI by improving the business climate, security, and governance.

### The Caribbean: growth, inflation, fiscal positions, and policy priorities
- Recent performance and outlook:
  - Economic momentum in the Caribbean slowed in 2023 compared to 2022.
  - Real GDP growth in the region (excluding Guyana) is estimated to have been 1.4 percent in 2023, declining from 4.2 percent in 2022.
  - The region (excluding Guyana) is projected to grow 1.1 percent in 2024 and 2.2 percent in 2025, while inflation is expected to remain low.
  - Guyana had real GDP growth of 33 percent in 2023 because of ramping up of oil production.
- Tourism and commodity dynamics:
  - In tourism-dependent countries, tourism growth slowed as tourist arrivals approached pre-pandemic levels.
  - In commodity-exporting countries, headwinds in the energy sector were offset by strong performance in the non-energy sector.
- Risks:
  - Downside risks include natural disasters, an economic slowdown in tourism-source countries, and greater international scrutiny of citizenship-by-investment programs (citizenship-by-investment revenues vary significantly, ranging from less than 1 percent of GDP in St. Lucia to 30 percent in Dominica in 2023).
  - For commodity exporters, commodity price volatility and a global slowdown could create uncertainty in export demand.
  - Haiti faces a security-driven supply-side shock that has fed inflation pressures since February 2024; further deterioration of security could undermine normalization of economic activity.
  - Hurricane Beryl caused fatalities and extensive physical destruction in early July, particularly in Grenada and St. Vincent and the Grenadines (and to a lesser extent in Barbados and Jamaica). Initial reports indicate that damages and losses for the region may well exceed US$0.5 billion.
- Fiscal and growth challenges:
  - Government debt-to-GDP ratios are projected to continue declining in 2024 in most countries, mainly supported by economic growth and primary surpluses in some countries.
  - In many countries, debt remains above 2019 levels, averaging in these countries 74 percent of GDP in 2023 (Box Figure 2.3).
  - Caribbean per capita income levels have remained stagnant at about 40 percent of the US level since the turn of the century.
  - Low aggregate productivity growth and insufficient human capital largely explain the low potential growth.
- Policy recommendations to foster higher, sustainable, and more inclusive growth:
  - Continue building fiscal buffers while protecting the most vulnerable: mobilize revenue and enhance spending efficiency.
  - Strengthen human capital and address impediments to productivity growth: improve resource allocation (for example, product market reforms); expand financial access (for example, centralized credit systems and financial sector reforms to increase competition); maintain a sound and stable financial sector with adequate supervision and regulation; address structural and youth unemployment (for example, labor market reforms, education, and training programs); improve the efficiency of government services (for example, developing digital infrastructure, streamlining business registration and tax administration); and foster integration within and outside the region in transportation and trade.
  - Accelerate investment in climate resilience and green energy transition: integrate adaptation and mitigation strategies into public investment management; strengthen public–private partnerships for investment; improve energy system efficiency while reducing domestic fossil fuel consumption through electrification; and lower the carbon intensity of fossil fuel production in commodity-exporting countries.
  - Mobilize private climate financing and draw on official financing, including the IMF’s Resilience and Sustainability Facility (countries such as Barbados and Jamaica have made use of this), to help address external financing needs and catalyze additional funding, including from the private sector.

*INTERNATIONAL MONETARY FUND • Regional Economic Outlook — Western Hemisphere, October 2024*

### Box 3. Latin America 7 and Other South American Countries: Country Focus

### Box 3. Latin America 7 and Other South American Countries: Country Focus

### Argentina — stabilization and outlook
- Firm program implementation has achieved a fiscal surplus (the first in 16 years), rebuilt reserves, and brought down inflation more quickly than anticipated through the first half of 2024.
- Economic activity expanding after April, with pace of recovery remaining uncertain and uneven across sectors.
- Policy needs: monetary, foreign exchange, and structural policies must continue to evolve to sustain gains.
- Projections under baseline policies:
  - GDP: after contracting by about 3.5 percent this year, projected to expand by about 5 percent in 2025.
  - Inflation: annual inflation projected to end the year below 140 percent before dropping to about 45 percent by the end of 2025.

### Brazil — robust growth and fiscal challenges
- Growth projected to remain robust at 3.0 percent in 2024, supported by resilient private consumption (aided by fiscal transfers and strong labor markets), rising investment, and smaller-than-anticipated disruptions from the floods.
- Growth projected to moderate to 2.2 percent in 2025 because of smaller statistical carryover effects, a still restrictive monetary policy, and the expected cooling of the labor market.
- Medium-term: growth expected to strengthen to 2.5 percent — an upward revision of 0.5 percentage point since the 2023 Article IV Consultation — reflecting supportive structural factors, including the efficiency-enhancing value-added tax reform and the acceleration in hydrocarbon production.
- Policy guidance:
  - Given stronger-than-expected growth, tight labor market, and above-target inflation expectations, maintaining flexibility on future interest rate changes is prudent.
  - Authorities’ commitment to improve the fiscal position is welcome; staff recommends a sustained and more ambitious fiscal effort to put public debt on a firmly downward path.

### Bolivia — acute imbalances and stabilization needs
- Economy facing significant challenges: acute fiscal and external imbalances amid declining natural gas production, constraints on external financing, ongoing monetization of the fiscal deficit, and an overvalued exchange rate have depleted international reserves.
- Growth outlook: deceleration from 3.1 in 2023 to 1.6 percent in 2024 due to lack of foreign exchange, low agricultural production because of El Niño, and sociopolitical tensions.
- Inflation: after a prolonged period of low inflation, expected to reach 6 percent in the end of 2024 and average about 4 percent thereafter.
- Policy recommendations: credible multiyear fiscal consolidation plan that phases out fuel subsidies (supported by strengthened social safety nets), realignment of the exchange rate, and measures to improve the environment for private sector-led investment and job creation.

### Chile — trend growth with fiscal and inflation considerations
- Economy on track to grow around trend as pandemic-built imbalances have largely resolved.
- Near-term improvement from higher copper prices and pick-up in mining exports; growth projected at 2.5 and 2.4 percent in 2024 and 2025, respectively.
- Inflation picked up in Q3; convergence to the central bank’s 3 percent target now expected only by the first half of 2026 because of one-off factors, particularly the increase in electricity tariffs.
- Fiscal stance: weaker-than-expected revenue growth requires additional efforts to meet the fiscal deficit target of 1.9 percent of GDP in 2024.
- Medium-term fiscal policy: targeted at a broadly balanced fiscal position by 2026 guided by the structural balance rule and the (45 percent of GDP) debt anchor.

### Colombia — gradual normalization and policy sequencing
- Growth expected to pick up to 1.6 percent in 2024 and 2.5 in 2025 as macroeconomic policies normalize.
- Inflation continuing to fall despite supply shock headwinds and resilient consumption.
- Monetary policy: expected to normalize gradually while remaining tight to bring inflation to below 6 percent by the end of 2024 and inside the 2- to 4-percent target band by the end of 2025.
- Staff recommendation: cautious and backloaded cuts aiming to return inflation firmly to the 3 percent target during 2025.
- Fiscal risks: fiscal policy remains bounded by the fiscal rule, though planned increases in headline deficits and debt pose risks; lower deficits and debt than those implied by the fiscal rule and reorienting expenditure toward investment would safeguard fiscal sustainability and support potential growth.

### Ecuador — weak near-term activity, stabilization under program
- Growth projected to slow to 0.3 percent in 2024 and 1.2 percent in 2025, facing headwinds including a challenging security situation and power outages.
- Medium-term growth expected to gradually rise to 2½ percent as macroeconomic stability takes hold and reforms are implemented under the IMF-supported program.
- Inflation projected to reach 2.8 percent by the end of 2024 (partly driven by a value-added tax rate hike and lower fuel subsidies) before declining to 1.7 percent in 2025.
- Policy needs: significant fiscal effort to sound public finances while protecting vulnerable groups and preserving space for priority spending on security, social protection, and public investment; rebuilding liquidity buffers to enhance resilience.

### Mexico — slowing activity and fiscal credibility needs
- After robust growth in 2023, activity has slowed in recent quarters.
- Growth expected to be about 1.5 percent in 2024 due to slowing exports to the United States and a restrictive monetary stance despite expansionary fiscal policy.
- Growth expected to slow further to 1.3 percent in 2025 reflecting planned fiscal tightening and a weaker external environment.
- Monetary policy: gradual easing of the restrictive stance, alongside a narrowing output gap and slower credit growth, expected to help inflation return to Banxico’s target by the end of 2025.
- Policy guidance: the 2025 budget (expected in mid-November) needs to provide a credible consolidation plan to meet medium-term fiscal targets and maintain fiscal sustainability.

### Paraguay — strong growth, fiscal consolidation underway
- 2023 growth among the fastest in the region at 4.7 percent; medium-term prospects supported by projected large green projects and two IMF programs (Policy Consultation Instrument and Resilience and Sustainability Facility).
- Headline inflation dropped sharply in 2023 and has recently stabilized around the 4-percent central bank target.
- Fiscal position: fiscal deficit for the budgetary central government rose to 4.1 percent of GDP in 2023 due to recognition of unrecorded pandemic expenditures; fiscal consolidation underway to bring the deficit back into compliance with the 1.5 percent of GDP limit under the Fiscal Responsibility Law by 2026.
- Public debt: increased because of recent external shocks but remains relatively low at about 40 percent of GDP.
- Credit rating: Moody’s upgraded the country’s credit rating to investment grade for the first time in July 2024.

### Peru — rebound with policy trade-offs
- Economy rebounding after contracting in 2023 due to climate-related shocks and social turmoil; recovery led by primary sectors as supply shocks dissipate.
- Demand-side: growth mostly driven by public investment; recovery in private consumption and investment remains modest amid political uncertainty.
- Inflation: headline inflation already at the midpoint of the 1 to 3 percent target range, allowing for further monetary policy easing.
- Fiscal policy: consolidation delayed to avoid endangering the incipient recovery given available fiscal space; fiscal policy guidance could be improved to enhance credibility as the revised 2024 fiscal deficit target could be at risk if revenue recovery takes longer than envisaged.
- Medium-term: fiscal consolidation necessary to preserve fiscal sustainability; structural reforms essential to lift potential growth.

### Uruguay — rebound from drought and stable fiscal path
- Growth expected to rebound to 3.2 percent in 2024 and 3 percent in 2025, reflecting recovery from a once-in-a-century drought, increased cellulose production, easing of financial conditions, and normalization of price differentials with Argentina.
- Inflation projected to pick up in H2 2024 but stay within the 3- to 6-percent target range following gradual easing of monetary policy and robust wage growth.
- Fiscal projection: non-financial public sector deficit of 3 percent of GDP in 2024 balances deficit reduction with safeguarding social spending; debt-to-GDP ratio projected to remain broadly stable, aligned with the net indebtedness target of the fiscal rule.

### Venezuela — production recovery amid deep crisis
- Economy expected to grow at 3 percent in 2024 as oil production continues to recover even if PDVSA’s own production has remained relatively constant.
- Domestic demand weighed by political uncertainty ahead of the presidential election and has remained flat.
- Inflation decelerating faster than initially anticipated; projected at 60 percent by the end of 2024.
- Drivers of inflation deceleration: exchange rate stability from increased central bank foreign exchange interventions, and a moderate increase in fiscal spending in the lead-up to the election.
- Context: despite improvements (end of hyperinflation and easing of sanctions), the country remains in a deep economic, political, and humanitarian crisis, which has resulted in about 7.8 million people (25 percent of the population) leaving the country since 2014.

*The authors of this box are the Latin America 7 (Brazil, Chile, Colombia, Mexico, Paraguay, Peru, Uruguay) and other South American country teams.*

### Appendix Table 1. Western Hemisphere: Main Economic Indicators¹

### Appendix Table 1. Western Hemisphere: Main Economic Indicators

### Real GDP Growth (Year-over-year percent change)
- North America: 2021: 6.0, 2022: 2.7, 2023: 2.8, 2024: 2.5, 2025: 2.1
- Canada: 2021: 5.3, 2022: 3.8, 2023: 1.2, 2024: 1.3, 2025: 2.4
- Mexico: 2021: 6.0, 2022: 3.7, 2023: 3.2, 2024: 1.5, 2025: 1.3
- United States: 2021: 6.1, 2022: 2.5, 2023: 2.9, 2024: 2.8, 2025: 2.2
- South America (aggregate): 2021: 7.5, 2022: 4.0, 2023: 1.5, 2024: 1.8, 2025: 2.7
- Argentina: 2021: 10.4, 2022: 5.3, 2023: –1.6, 2024: –3.5, 2025: 5.0
- Brazil: 2021: 4.8, 2022: 3.0, 2023: 2.9, 2024: 3.0, 2025: 2.2
- Chile: 2021: 11.3, 2022: 2.1, 2023: 0.2, 2024: 2.5, 2025: 2.4
- Colombia: 2021: 10.8, 2022: 7.3, 2023: 0.6, 2024: 1.6, 2025: 2.5
- Peru: 2021: 13.4, 2022: 2.7, 2023: –0.6, 2024: 3.0, 2025: 2.6
- Venezuela: 2021: 1.0, 2022: 8.0, 2023: 4.0, 2024: 3.0, 2025: 3.0
- CAPDR (Central America, Panama, and the Dominican Republic): 2021: 11.1, 2022: 5.4, 2023: 4.1, 2024: 3.8, 2025: 3.8
- Commodity Exporters (aggregate): 2021: 4.0, 2022: 22.7, 2023: 14.3, 2024: 22.7, 2025: 8.7
- Guyana: 2021: 20.1, 2022: 62.3, 2023: 33.0, 2024: 43.8, 2025: 14.4
- Latin America and the Caribbean (Memorandum): 2021: 7.4, 2022: 4.2, 2023: 2.2, 2024: 2.1, 2025: 2.5
- LAC (simple average): 2021: 8.3, 2022: 7.8, 2023: 3.7, 2024: 4.1, 2025: 3.3
- LAC excluding Argentina and Venezuela: 2021: 7.1, 2022: 4.0, 2023: 2.6, 2024: 2.6, 2025: 2.2

### Inflation (End of period; percent)
- North America: 2021: 7.2, 2022: 6.6, 2023: 3.4, 2024: 2.5, 2025: 2.1
- Canada: 2021: 4.7, 2022: 6.6, 2023: 3.2, 2024: 2.0, 2025: 1.9
- Mexico: 2021: 7.4, 2022: 7.8, 2023: 4.7, 2024: 4.5, 2025: 3.2
- United States: 2021: 7.4, 2022: 6.4, 2023: 3.2, 2024: 2.3, 2025: 1.9
- South America (aggregate): 2021: 14.2, 2022: 18.4, 2023: 24.3, 2024: 18.0, 2025: 8.7
- Argentina: 2021: 50.9, 2022: 94.8, 2023: 211, 2024: 140, 2025: 45.0
- Brazil: 2021: 10.1, 2022: 5.8, 2023: 4.6, 2024: 4.3, 2025: 3.3
- Chile: 2021: 7.1, 2022: 12.8, 2023: 3.9, 2024: 4.5, 2025: 3.5
- Colombia: 2021: 5.7, 2022: 13.2, 2023: 9.3, 2024: 5.7, 2025: 3.5
- Peru: 2021: 6.4, 2022: 8.5, 2023: 3.2, 2024: 2.4, 2025: 2.0
- Venezuela: 2021: 862, 2022: 3419, 2023: 060, 2024: 060, 2025: 0.1
- CAPDR: 2021: 5.1, 2022: 7.5, 2023: 2.7, 2024: 3.0, 2025: 3.3
- Commodity Exporters (aggregate): 2021: 11.5, 2022: 13.7, 2023: 4.8, 2024: 3.8, 2025: 4.8
- Guyana: 2021: 5.7, 2022: 7.2, 2023: 2.0, 2024: 3.5, 2025: 5.5
- Latin America and the Caribbean (Memorandum): 2021: 11.7, 2022: 14.9, 2023: 17.2, 2024: 13.2, 2025: 6.9
- LAC (simple average): 2021: 8.2, 2022: 12.5, 2023: 11.6, 2024: 8.7, 2025: 5.0

Note: CPI inflation aggregates exclude Venezuela and are geometric purchasing-power-parity GDP-weighted averages.

### External Current Account Balance (Percent of GDP)
- North America: 2021: –3.2, 2022: –3.5, 2023: –2.9, 2024: –2.9, 2025: –2.8
- Canada: 2021: 0.0, 2022: –0.4, 2023: –0.7, 2024: –1.0, 2025: –1.3
- Mexico: 2021: 3.2, 2022: –0.3, 2023: –1.2, 2024: –0.3, 2025: –0.7
- United States: 2021: 1.9, 2022: –3.7, 2023: –3.9, 2024: –3.3, 2025: –3.3
- South America (aggregate): 2021: –2.3, 2022: –2.6, 2023: –1.4, 2024: –1.2, 2025: –1.3
- Argentina: 2021: 1.4, 2022: –0.6, 2023: –3.2, 2024: 0.6, 2025: 0.6
- Brazil: 2021: –2.4, 2022: –2.1, 2023: –1.0, 2024: –1.7, 2025: –1.8
- Chile: 2021: –7.3, 2022: –8.7, 2023: –3.5, 2024: –2.3, 2025: –2.7
- Colombia: 2021: –5.6, 2022: –6.1, 2023: –2.5, 2024: –2.5, 2025: –2.6
- Peru: 2021: –2.1, 2022: –4.0, 2023: 0.8, 2024: 0.3, 2025: –0.1
- Venezuela: 2021: –1.2, 2022: 3.6, 2023: 3.1, 2024: 4.1, 2025: 3.3
- CAPDR: 2021: –1.8, 2022: –2.9, 2023: –1.3, 2024: –1.1, 2025: –1.2
- Commodity Exporters (aggregate): 2021: 2.3, 2022: 18.9, 2023: 10.9, 2024: 18.1, 2025: 9.0
- Guyana: 2021: –26.0, 2022: 26.2, 2023: 10.3, 2024: 36.9, 2025: 12.6
- Latin America and the Caribbean (Memorandum): 2021: –1.8, 2022: –2.2, 2023: –1.1, 2024: –0.9, 2025: –1.1
- LAC (simple average): 2021: –5.6, 2022: –3.5, 2023: –2.7, 2024: –1.9, 2025: –2.8

Sources and note: Current account aggregates are US dollar nominal GDP-weighted averages. See Country Notes for details on the data. Data in this table have been compiled based on information available through October 7, 2024.

---

### Appendix Table 2. Western Hemisphere: Main Fiscal Indicators

### General Government Primary Expenditure (Percent of GDP)
- North America: 2021: 39.2, 2022: 33.0, 2023: 32.3, 2024: 33.0, 2025: 32.7
- Canada: 2021: 42.8, 2022: 38.3, 2023: 39.3, 2024: 40.0, 2025: 39.2
- Mexico: 2021: 22.8, 2022: 23.2, 2023: 22.4, 2024: 24.7, 2025: 22.6
- United States: 2021: 39.9, 2022: 33.1, 2023: 32.4, 2024: 33.0, 2025: 32.8
- South America (aggregate): 2021: 32.3, 2022: 32.5, 2023: 33.6, 2024: 32.7, 2025: 32.7
- Argentina: 2021: 36.1, 2022: 35.6, 2023: 35.3, 2024: 30.2, 2025: 30.9
- Brazil: 2021: 33.6, 2022: 35.4, 2023: 37.2, 2024: 37.7, 2025: 37.8
- Chile: 2021: 32.7, 2022: 25.6, 2023: 26.3, 2024: 25.9, 2025: 25.8
- Colombia: 2021: 31.1, 2022: 29.7, 2023: 30.8, 2024: 28.4, 2025: 27.9
- Peru: 2021: 22.1, 2022: 22.0, 2023: 20.9, 2024: 20.8, 2025: 20.6
- Venezuela: 2021: 11.8, 2022: 14.1, 2023: 14.1
- CAPDR: 2021: 17.9, 2022: 16.9, 2023: 16.7, 2024: 16.9, 2025: 16.7
- Commodity Exporters (aggregate): 2021: 27.4, 2022: 23.2, 2023: 25.1, 2024: 25.3, 2025: 24.9
- Guyana: 2021: 25.5, 2022: 20.3, 2023: 23.1, 2024: 23.6, 2025: 22.8
- Latin America and the Caribbean (Memorandum): 2021: 28.6, 2022: 28.8, 2023: 29.1, 2024: 29.0, 2025: 28.5

### General Government Primary Balance (Percent of GDP)
- North America: 2021: –7.9, 2022: –0.9, 2023: –3.1, 2024: –3.4, 2025: –2.8
- Canada: 2021: –3.6, 2022: –0.3, 2023: –0.2, 2024: –1.5, 2025: –0.7
- Mexico: 2021: 0.0, 2022: 0.7, 2023: 1.5, 2024: –0.8, 2025: 1.0
- United States: 2021: –8.7, 2022: –1.1, 2023: –3.6, 2024: –3.7, 2025: –3.2
- South America (aggregate): 2021: –0.8, 2022: 0.1, 2023: –1.9, 2024: –0.4, 2025: 0.1
- Argentina: 2021: –2.5, 2022: –1.7, 2023: –2.8, 2024: 1.8, 2025: 2.9
- Brazil: 2021: 2.0, 2022: 1.3, 2023: –2.0, 2024: –0.5, 2025: –0.7
- Chile: 2021: –6.9, 2022: 1.8, 2023: –1.9, 2024: –1.7, 2025: –0.8
- Colombia: 2021: –4.4, 2022: –2.4, 2023: 1.1, 2024: –0.1, 2025: 0.2
- Peru: 2021: –1.2, 2022: 0.0, 2023: –1.3, 2024: –1.6, 2025: –0.5
- Venezuela: 2021: –4.6, 2022: –5.9, 2023: –3.3
- CAPDR: 2021: –0.9, 2022: 0.3, 2023: 0.5, 2024: 0.4, 2025: 0.4
- Commodity Exporters (aggregate): 2021: –5.2, 2022: 0.7, 2023: –0.7, 2024: –3.7, 2025: –1.5
- Guyana: 2021: –6.8, 2022: –4.9, 2023: –5.4, 2024: –5.4, 2025: –5.9
- Latin America and the Caribbean (Memorandum): 2021: –0.6, 2022: 0.3, 2023: –0.8, 2024: –0.4, 2025: 0.2

### General Government Gross Debt (Percent of GDP)
- North America: 2021: 120.1, 2022: 114.2, 2023: 113.9, 2024: 116.1, 2025: 118.9
- Canada: 2021: 113.5, 2022: 107.4, 2023: 107.5, 2024: 106.1, 2025: 103.2
- Mexico: 2021: 56.9, 2022: 54.2, 2023: 53.1, 2024: 57.7, 2025: 57.9
- United States: 2021: 124.5, 2022: 118.6, 2023: 118.7, 2024: 121.0, 2025: 124.1
- South America (aggregate): 2021: 77.6, 2022: 75.1, 2023: 85.9, 2024: 77.2, 2025: 77.6
- Argentina: 2021: 81.0, 2022: 84.5, 2023: 155.4, 2024: 91.5, 2025: 78.5
- Brazil: 2021: 88.9, 2022: 83.9, 2023: 84.7, 2024: 87.6, 2025: 92.0
- Chile: 2021: 36.4, 2022: 37.8, 2023: 39.4, 2024: 41.0, 2025: 41.6
- Colombia: 2021: 64.0, 2022: 60.1, 2023: 54.3, 2024: 55.8, 2025: 56.1
- Peru: 2021: 36.1, 2022: 34.0, 2023: 33.0, 2024: 34.2, 2025: 35.3
- Venezuela: 2021: 249.7, 2022: 160.7, 2023: 146.3
- CAPDR: 2021: 55.7, 2022: 52.8, 2023: 51.8, 2024: 51.8, 2025: 51.3
- Commodity Exporters (aggregate): 2021: 61.3, 2022: 48.3, 2023: 48.4, 2024: 48.4, 2025: 47.5
- Guyana: 2021: 43.2, 2022: 26.5, 2023: 26.4, 2024: 25.5, 2025: 26.0
- Latin America and the Caribbean (Memorandum): 2021: 70.5, 2022: 68.0, 2023: 73.9, 2024: 69.4, 2025: 69.8

Sources and note: All indicators are reported on a fiscal year basis. Regional aggregates are fiscal year US dollar nominal GDP-weighted averages. Data in this table have been compiled based on information available through October 7, 2024.

---

### Country Notes (selected methodological and coverage points)
- Regional output growth aggregates are purchasing-power-parity GDP-weighted averages. CPI inflation aggregates exclude Venezuela.
- Data in the tables have been compiled based on information available through October 7, 2024.
- Puerto Rico is classified as an advanced economy; its statistical data are maintained on a separate and independent basis.
- Fiscal coverage varies across countries (central government, consolidated public sector, nonfinancial public sector) — see country-specific notes for details (examples included in the source: Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, United States, Uruguay, Venezuela).
- Venezuela: projections and indicators should be interpreted with caution due to lack of recent Article IV consultations, incomplete metadata, and effects of hyperinflation; consumer prices are excluded from all WEO group composites.

*Sources: IMF, World Economic Outlook database; and IMF staff calculations and projections.*

---


_Source: https://www.imf.org/-/media/files/publications/reo/whd/2024/october/english/text.pdf_