{ "title": "Transcript of April 2021 Western Hemisphere Press Briefing", "publication": "IMF News, April 15, 2021", "sourceUrl": "https://www.imf.org/en/news/articles/2021/04/16/tr041621-transcript-of-april-2021-western-hemisphere-press-briefing", "canonical": "https://www.imf.org/en/news/articles/2021/04/16/tr041621-transcript-of-april-2021-western-hemisphere-press-briefing", "overlayPath": "/en/news/articles/2021/04/16/tr041621-transcript-of-april-2021-western-hemisphere-press-briefing/index.md", "summary": "Latin America and the Caribbean contracted \"7 por ciento\" in 2020.", "publishDate": "2021-04-15", "sections": [ { "heading": "Regional growth outlook and key projections", "content": "- Latin America and the Caribbean contracted \"7 por ciento\" in 2020.\n- The global economy contracted \"3.3\" in 2020.\n- IMF projection for Latin America and the Caribbean in 2021: recovery of \"4.6\".\n- Projection for emerging market economies excluding China in 2021: \"5.8 por ciento\".\n- Projection for China in 2021: around \"8 por ciento\".\n- U.S. growth cited as \"almost al 6.5 por ciento durante 2021\".\n- Expected timing for GDP per capita to return to pre-pandemic level: \"tal vez hasta 2024\".\n- Caveat: Projections are subject to elevated uncertainty given the pandemic’s persistence." }, { "heading": "Drivers of the recovery and international spillovers", "content": "- Factors behind the second-half 2020 recovery:\n - Economies adapted operations under distancing and quarantine.\n - Stronger-than-anticipated policy responses (fiscal and monetary).\n - External stimulus in advanced economies generated spillovers via:\n - Prices of commodities.\n - Remittances.\n - Greater dynamism in manufacturing exports.\n- International context supports regional recovery: U.S. and China growth and elevated commodity prices." }, { "heading": "Risks and policy implications (fiscal, monetary, financial)", "content": "- Main near-term risk: persistence and intensification of the health crisis; importance of accelerating vaccination campaigns in 2021.\n- Risk from rising international interest rates: potential for increased financial volatility that could limit the projected \"4.6\" recovery.\n- Fiscal outlook:\n - Region will exit the pandemic with significantly higher debt levels, raising vulnerability to interest rate shifts.\n - Policy challenge: support recovery in 2021 where fiscal space exists while signaling credible paths to restore debt sustainability thereafter.\n- Monetary policy:\n - Central banks can maintain accommodative stances; rates are expected to remain below equilibrium and banks may expand balance sheets to support markets.\n - Objective: prevent transitory inflation upticks from becoming entrenched expectations." }, { "heading": "Labor market, poverty, and education impacts", "content": "- Labor market recovery: about two thirds of jobs lost at the pandemic peak have been recovered; one third remain lost, concentrated among lower-income and lower-education workers.\n- Poverty: estimated increase in the population in poverty in 2021 of \"casi en 20 millones de personas\" relative to 2019.\n- Education losses:\n - Weeks of school closures in Latin America among the largest in emerging markets.\n - Significant medium-term costs in future earnings for children and adolescents aged 10–19.\n - Policy priority: implement measures to partly correct accumulated educational losses, especially for lower-income students with limited connectivity." }, { "heading": "Inflation dynamics and central bank responses", "content": "- Regional inflation upticks expected in the second quarter of 2021, reflecting very low price levels in Q2 2020.\n- These increases are expected to be transitory as economies operate below potential, but central banks must:\n - Avoid letting transitory shocks contaminate medium-term inflation expectations.\n - Rely on inflation-targeting with floating exchange rates where applicable; such frameworks have been effective in many countries.\n- Country note: Mexico reported inflation in March as \"4 67 por ciento\" (as stated in the briefing); central banks should monitor expectations for 2023–2024." }, { "heading": "Country-specific points from Q&A", "content": "- Mexico\n - Second-quarter and transitory inflation factors explained as base effects from Q2 2020; central bank vigilance on expectations necessary.\n - U.S. interest rate increases have not yet caused major problems; floating exchange rates and reserves are buffers.\n - As of the briefing, Mexico had not formally requested use of the Flexible Credit Line; authorities have explored the option publicly.\n- Argentina\n - Inflation is elevated and a persistent concern; reducing it requires a macroeconomic framework and measures to anchor expectations.\n - School and distancing restrictions risk weighing on the short-term rebound; economic adaptation moderates the mechanical impact of mobility reductions.\n - Staff-level technical work on a possible program has advanced; timing to reach an agreement depends on Argentine authorities’ decision.\n - On Special Drawing Rights (SDRs), comments by IMF management (Jeffrey Okamoto referenced) would be reviewed for exact wording; traditionally SDRs complement reserves.\n- Ecuador\n - IMF staff had worked with the current government; transition discussions expected with the president-elect’s team once they engage.\n- Costa Rica\n - Program approved by IMF Executive Board; pending approval by the national legislature (Asamblea Nacional).\n- Peru\n - IMF projection for 2021 growth was \"8,5 por ciento\" under an assumption of earlier control of the second wave; despite recent setbacks, prospects for a strong rebound remain due to large 2020 contraction and commodity prices.\n - Peru contracted \"más de 11 por ciento\" in 2020.\n- Chile\n - IMF analysis: existing 2021 budgeted supports are adequate; Chile is projected to be the first Latin American economy to exceed 2019 GDP in 2021 under current policies.\n - IMF view: avoid a third pension fund withdrawal or use of unemployment insurance funds for pandemic relief because:\n - Such measures undermine pension system structure and long-term savings.\n - They are poorly targeted and create medium-term costs.\n - Prefer targeted, budget-funded, time-bound measures if additional support is needed.\n- Brazil\n - IMF expected Brazil to grow \"around 3.7\" in 2021.\n - Comparative projected growth references: Chile \"above 6 percent\", Colombia and Mexico \"around 5 percent\", Peru \"8.5\".\n - Brazil faces a trade-off: large 2020 fiscal support but need to avoid undermining debt sustainability; recent measures extended targeted cash transfers at a lower level and there are efforts to strengthen the fiscal framework.\n - Vaccination: Brazil is in the region’s upper tier for vaccination rates but behind Chile; accelerating vaccination is important.\n- Jamaica and tourism-dependent economies\n - Many Caribbean economies saw debt ratios rise; an example: countries heading below a 90 percent debt-to-GDP threshold due to a \"10 percent decline in GDP\" are now \"around 100 percent again\".\n - Policy trade-off: balance providing support for the poor and productive sectors with risks of triggering market volatility.\n - IMF notes that a new allocation of Special Drawing Rights (SDRs) would increase authorities’ firepower and allow more forward-leaning support while retaining instruments to respond to volatility." }, { "heading": "Policy recommendations and good-practice principles emphasized", "content": "- Health response: accelerate vaccination campaigns to enable economic reopening.\n- Fiscal policy:\n - Countries with fiscal space should continue supporting recovery in 2021, though generally at lower levels than in 2020.\n - Communicate clear, credible medium-term plans to restore debt sustainability once the emergency passes.\n - Use budgetary instruments for targeted support rather than drawing down structural funds (e.g., pension accounts or unemployment insurance) that cause long-term costs and poor targeting.\n- Monetary policy:\n - Maintain accommodative stances where appropriate; central banks should prevent transitory inflation from unanchoring expectations.\n - Use central bank balance sheet tools to support financial market functioning when needed.\n- External buffers:\n - Floating exchange rates, sizable reserves, and contingent credit lines have helped manage capital flow volatility.\n - SDR reallocations would strengthen central bank balance sheets and provide contingency space.\n\nTranscript of April 2021 Western Hemisphere Press Briefing, April 15, 2021. 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- Costa Rica and the IMF\n- Jamaica and the IMF\n- Mexico and the IMF\n- Transcripts\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/04/16/tr041621-transcript-of-april-2021-western-hemisphere-press-briefing" } ], "bullets": [ "[Markdown version](/en/news/articles/2021/04/16/tr041621-transcript-of-april-2021-western-hemisphere-press-briefing/index.md)", "[Structured JSON version](/en/news/articles/2021/04/16/tr041621-transcript-of-april-2021-western-hemisphere-press-briefing/index.json)", "[Bundle manifest](/en/news/articles/2021/04/16/tr041621-transcript-of-april-2021-western-hemisphere-press-briefing/bundle-manifest.json)", "Published: April 15, 2021", "Latin America and the Caribbean contracted \"7 por ciento\" in 2020.", "The global economy contracted \"3.3\" in 2020.", "IMF projection for Latin America and the Caribbean in 2021: recovery of \"4.6\".", "Projection for emerging market economies excluding China in 2021: \"5.8 por ciento\".", "Projection for China in 2021: around \"8 por ciento\".", "U.S. growth cited as \"almost al 6.5 por ciento durante 2021\".", "Expected timing for GDP per capita to return to pre-pandemic level: \"tal vez hasta 2024\".", "Caveat: Projections are subject to elevated uncertainty given the pandemic’s persistence.", "Factors behind the second-half 2020 recovery:", "International context supports regional recovery: U.S. and China growth and elevated commodity prices.", "Main near-term risk: persistence and intensification of the health crisis; importance of accelerating vaccination campaigns in 2021.", "Risk from rising international interest rates: potential for increased financial volatility that could limit the projected \"4.6\" recovery.", "Fiscal outlook:", "Monetary policy:", "Labor market recovery: about two thirds of jobs lost at the pandemic peak have been recovered; one third remain lost, concentrated among lower-income and lower-education workers.", "Poverty: estimated increase in the population in poverty in 2021 of \"casi en 20 millones de personas\" relative to 2019.", "Education losses:", "Regional inflation upticks expected in the second quarter of 2021, reflecting very low price levels in Q2 2020.", "These increases are expected to be transitory as economies operate below potential, but central banks must:", "Country note: Mexico reported inflation in March as \"4 67 por ciento\" (as stated in the briefing); central banks should monitor expectations for 2023–2024.", "Mexico", "Argentina", "Ecuador", "Costa Rica", "Peru", "Chile", "Brazil", "Jamaica and tourism-dependent economies", "Health response: accelerate vaccination campaigns to enable economic reopening.", "Fiscal policy:", "Monetary policy:", "External buffers:", "[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)", "[Costa Rica and the IMF](http://www.imf.org/external/country/CRI/index.htm)", "[Jamaica and the IMF](http://www.imf.org/external/country/JAM/index.htm)", "[Mexico and the IMF](http://www.imf.org/external/country/MEX/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/2021/04/16/tr041621-transcript-of-april-2021-western-hemisphere-press-briefing/index.md", "json": "/en/news/articles/2021/04/16/tr041621-transcript-of-april-2021-western-hemisphere-press-briefing/index.json", "bundleManifest": "/en/news/articles/2021/04/16/tr041621-transcript-of-april-2021-western-hemisphere-press-briefing/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T00:19:52.185Z" }