Alejandro Werner
Director, Western Hemisphere Dept
", "publishDate": "2019-01-25", "sections": [ { "heading": "Regional growth outlook and drivers", "content": "- IMF projects regional growth of 2 por ciento in 2019 and 2.5 en 2020 for América Latina.\n- Excluding Venezuela, the regional average is 2.3 por ciento in 2019.\n- Acceleration in 2019 is driven mainly by:\n - A rebound in Brazil.\n - A substantially smaller contraction in Argentina in 2019 compared with 2018.\n- Centroamérica is expected to grow at \"alrededor del 4 por ciento, 3.8 por ciento\".\n- Caribbean economies are expected to accelerate toward growth rates \"más cercanas al 2%\".\n- Risks slowing the regional acceleration:\n - Weakening global activity.\n - Increased uncertainty about economic policy implementation in countries with new administrations.\n - Intensification of trade tensions.\n - Tightening of global financial conditions and episodes of market volatility." }, { "heading": "Key country assessments and near-term projections", "content": "- Argentina\n - 2018 contraction: 2.8 por ciento.\n - Projected 2019 contraction: 1.7 por ciento.\n - IMF expects Argentina to begin exhibiting quarterly growth starting in Q2 2019, supported by:\n - Real wage increases.\n - Falling interest rates.\n - Recent stability in financial variables.\n - Inflation and expectations:\n - Market expectations around \"28 por ciento, 27 por ciento\" for 2019.\n - Latest Staff Report projection remains at \"20.2 por ciento\" pending revision after the program's third review (team visit to Buenos Aires in the second week of February).\n - IMF notes a likely upward revision above \"20 por ciento\" given high end-2018 inflation.\n - IMF expects a reduction of inflation by \"en los dos dígitos\" in 2019 and stabilization toward single-digit inflation in the medium term if fiscal and monetary targets are met.\n - Political uncertainty around elections could affect investment and the medium‑term policy framework; a political shift could materially affect program outcomes.\n\n- Venezuela\n - 2018 hyperinflation rate was \"cercana a 2 millones por ciento\".\n - IMF’s scenario for 2019 hyperinflation: \"10 millones por ciento\" if no policy changes occur.\n - 2018 contraction was \"18 porciento\".\n - IMF expects continued double-digit contraction in 2019 and cumulative contraction since 2013 to be \"mayor al 50 por ciento\" (economy today is \"menos de la mitad\" of 2013).\n - Continued acceleration of hyperinflation, deepening humanitarian crisis, and intensified migration flows are expected absent policy change.\n - IMF monitoring of official data delivery and member states' positioning on recognition is ongoing.\n\n- Brazil\n - IMF projections assume compliance with the constitutional expenditure ceiling.\n - Implicit in forecasts is that either a social security reform or other large entitlement reform will be enacted to help comply with the ceiling.\n - IMF views social security reform as \"one of the key elements\" to place public finances on a sustainable path and to enable higher potential growth via improved fiscal sustainability and a more supportive environment for investment.\n\n- Mexico\n - IMF notes market perception is favorable regarding fiscal objectives, the budget, and macroeconomic management.\n - Theft of fuel is estimated at \"alrededor de 3000 millones de dólares anuales\".\n - IMF supports the objective of eliminating fuel theft because it:\n - Improves PEMEX finances.\n - Supports public finance consolidation.\n - Reinforces the rule of law.\n - IMF cautions that design of anti-theft measures should minimize adverse collateral effects on the rest of the economy.\n\n- Chile\n - IMF endorses structural reforms that:\n - Maintain fiscal consolidation toward a primary balance over the medium term and stabilize the debt/GDP ratio.\n - Reduce distortions to investment (tax reform).\n - Strengthen pension system viability (pension reform).\n - Reduce regulatory burdens and promote investment, including adoption of information technologies.\n - Quantitative effects on potential growth will be assessed in the next Article IV consultation.\n\n- Peru, Colombia, other Pacific Alliance members\n - Peru: projected growth of \"3.8 por ciento\".\n - Colombia and Chile: expected growth \"alrededor de 3.4 por ciento\" (Chile decelerating slightly, Colombia accelerating).\n - These economies have largely absorbed earlier terms-of-trade shocks and are on a stable growth path, with growth slightly below potential.\n\n- Smaller economies (Uruguay, Paraguay)\n - Have shown important resilience and strong economic management, limiting contagion from regional volatility." }, { "heading": "Financial conditions and spillovers from advanced economies", "content": "- US monetary policy and the Fed\n - IMF considers a data-dependent, cautious Fed approach appropriate as the US nears neutral interest rates.\n - A more cautious Fed is broadly positive for Latin America through laxer global financial conditions, but:\n - Countries with strong real ties to the US (e.g., Mexico) may be more affected by weaker US real activity.\n - Commodity-exporting countries in the Southern Cone may benefit more from eased financial conditions.\n- Global risks emphasized:\n - Trade tensions.\n - Episodes of volatility and tightening in financial conditions like those seen at end-2018 could spill over to the region." }, { "heading": "IMF engagement, conditionality, and technical advice", "content": "- Ecuador\n - Ecuador has not formally requested a program from the IMF.\n - Over the last 6–8 months, the IMF has engaged in technical consultations with Ecuador's Ministry of Finance on macroeconomic projections and policy advice.\n - IMF views the Moreno administration's announced plan as moving in the right direction to restore macroeconomic balance while striving to protect social spending and vulnerable groups.\n - The IMF stands ready to negotiate a financial support program promptly if Ecuador requests one.\n\n- IMF program approach and monitoring\n - For countries with programs (e.g., Argentina), IMF assessments stress adherence to fiscal and monetary targets as anchors of credibility.\n - For Venezuela, IMF has not revised full macro forecasts outside the WEO publication timetable due to severe data and policy uncertainty; a full update would come in spring with the World Economic Outlook.\n - IMF will closely monitor Brazil's announced reform agenda, especially social security reform, for its importance to fiscal sustainability and capital market development." }, { "heading": "Policy implications and recommendations (summarized)", "content": "- Maintain fiscal consolidation where needed to stabilize debt dynamics (Brazil: comply with expenditure ceiling; Argentina: meet program fiscal targets).\n- Pursue structural reforms to boost investment and medium-term potential growth:\n - Brazil: social security and entitlement reforms, regulatory and trade-opening measures.\n - Chile: tax, pension, and regulatory reforms plus technology adoption.\n- Continue consistent and credible monetary policies to reduce inflation and anchor expectations (Argentina: continued monetary consistency expected to lower inflation trends).\n- Design measures to combat illicit activities (e.g., fuel theft in Mexico) to achieve objectives while minimizing collateral economic impacts.\n- Prepare for global risk scenarios (trade tensions and financial tightening) by maintaining policy buffers and clear communications." }, { "heading": "Exact key numerical figures cited in the briefing", "content": "- Regional growth projections: \"2 por ciento\" in 2019 and \"2.5\" en 2020.\n- Regional average excluding Venezuela: \"2.3 por ciento\".\n- Centroamérica growth: \"alrededor del 4 por ciento, 3.8 por ciento\".\n- Caribbean growth: toward \"más cercanas al 2%\".\n- Argentina:\n - 2018 contraction: \"2.8 por ciento\".\n - 2019 projected contraction: \"1.7 por ciento\".\n - Staff Report inflation projection (previous): \"20.2 por ciento\".\n - Market inflation expectations cited: \"28 por ciento, 27 por ciento\".\n- Venezuela:\n - 2018 hyperinflation: \"cercana a 2 millones por ciento\".\n - 2019 hyperinflation scenario: \"10 millones por ciento\" (if no policy change).\n - 2018 contraction: \"18 porciento\".\n - Cumulative contraction since 2013: \"mayor al 50 por ciento\".\n- Estimated annual fuel theft in Mexico: \"alrededor de 3000 millones de dólares anuales\".\n- Peru projected growth: \"3.8 por ciento\".\n- Colombia and Chile projected growth: \"alrededor de 3.4 por ciento\".\n\nTranscript of Western Hemisphere Department Press Briefing, January 25, 2019 — Alejandro Werner, Director, Western Hemisphere Department, IMF; IMF Communications Department.\n\n---\n\n\n References\n\n- Argentina and the IMF\n- Brazil and the IMF\n- Chile and the IMF\n- Colombia and the IMF\n- Ecuador and the IMF\n- República Bolivariana de Venezuela and the IMF\n- Uruguay and the IMF\n- Transcripts\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/01/28/tr012519-transcript-of-western-hemisphere-department-press-briefing" } ], "bullets": [ "[Markdown version](/en/news/articles/2019/01/28/tr012519-transcript-of-western-hemisphere-department-press-briefing/index.md)", "[Structured JSON version](/en/news/articles/2019/01/28/tr012519-transcript-of-western-hemisphere-department-press-briefing/index.json)", "[Bundle manifest](/en/news/articles/2019/01/28/tr012519-transcript-of-western-hemisphere-department-press-briefing/bundle-manifest.json)", "Published: January 25, 2019", "IMF projects regional growth of 2 por ciento in 2019 and 2.5 en 2020 for América Latina.", "Excluding Venezuela, the regional average is 2.3 por ciento in 2019.", "Acceleration in 2019 is driven mainly by:", "Centroamérica is expected to grow at \"alrededor del 4 por ciento, 3.8 por ciento\".", "Caribbean economies are expected to accelerate toward growth rates \"más cercanas al 2%\".", "Risks slowing the regional acceleration:", "Argentina", "Venezuela", "Brazil", "Mexico", "Chile", "Peru, Colombia, other Pacific Alliance members", "Smaller economies (Uruguay, Paraguay)", "US monetary policy and the Fed", "Global risks emphasized:", "Ecuador", "IMF program approach and monitoring", "Maintain fiscal consolidation where needed to stabilize debt dynamics (Brazil: comply with expenditure ceiling; Argentina: meet program fiscal targets).", "Pursue structural reforms to boost investment and medium-term potential growth:", "Continue consistent and credible monetary policies to reduce inflation and anchor expectations (Argentina: continued monetary consistency expected to lower inflation trends).", "Design measures to combat illicit activities (e.g., fuel theft in Mexico) to achieve objectives while minimizing collateral economic impacts.", "Prepare for global risk scenarios (trade tensions and financial tightening) by maintaining policy buffers and clear communications.", "Regional growth projections: \"2 por ciento\" in 2019 and \"2.5\" en 2020.", "Regional average excluding Venezuela: \"2.3 por ciento\".", "Centroamérica growth: \"alrededor del 4 por ciento, 3.8 por ciento\".", "Caribbean growth: toward \"más cercanas al 2%\".", "Argentina:", "Venezuela:", "Estimated annual fuel theft in Mexico: \"alrededor de 3000 millones de dólares anuales\".", "Peru projected growth: \"3.8 por ciento\".", "Colombia and Chile projected growth: \"alrededor de 3.4 por ciento\".", "[Argentina and the IMF](http://www.imf.org/external/country/ARG/index.htm)", "[Brazil and the IMF](http://www.imf.org/external/country/BRA/index.htm)", "[Chile and the IMF](http://www.imf.org/external/country/CHL/index.htm)", "[Colombia and the IMF](http://www.imf.org/external/country/COL/index.htm)", "[Ecuador and the IMF](http://www.imf.org/external/country/ECU/index.htm)", "[República Bolivariana de Venezuela and the IMF](http://www.imf.org/external/country/VEN/index.htm)", "[Uruguay and the IMF](http://www.imf.org/external/country/URY/index.htm)", "[Transcripts](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2019/01/28/tr012519-transcript-of-western-hemisphere-department-press-briefing/index.md", "json": "/en/news/articles/2019/01/28/tr012519-transcript-of-western-hemisphere-department-press-briefing/index.json", "bundleManifest": "/en/news/articles/2019/01/28/tr012519-transcript-of-western-hemisphere-department-press-briefing/bundle-manifest.json" }, "generatedAtUtc": "2026-09-25T22:29:29.357Z" }