{ "title": "Transcript of Western Hemisphere Department April 2024 Press Briefing", "publication": "IMF News, April 19, 2024", "sourceUrl": "https://www.imf.org/en/news/articles/2024/04/19/tr041924-transcript-of-western-hemisphere-april-2024-press-briefing", "canonical": "https://www.imf.org/en/news/articles/2024/04/19/tr041924-transcript-of-western-hemisphere-april-2024-press-briefing", "overlayPath": "/en/news/articles/2024/04/19/tr041924-transcript-of-western-hemisphere-april-2024-press-briefing/index.md", "summary": "Good afternoon. Welcome, everyone. Welcome to the Regional Economic Outlook Press Briefing for the Western Hemisphere.", "publishDate": "2024-04-19", "sections": [ { "heading": "Regional outlook — resilience and growth", "content": "- The region \"has showed quite a bit of resilience\" with a stronger-than-expected rebound from the Pandemic attributable partly to progress in strengthening macroeconomic frameworks.\n- With most economies operating near potential, activity has been \"generally moderating in recent quarters.\"\n- Growth projection: slowing from \"2.3 percent that the region grew in 2023 to 2 percent this year.\"\n- Risk assessment: \"We see risk around this baseline projection as broadly balanced.\"" }, { "heading": "Labor markets and inflation", "content": "- Labor markets: \"unemployment still at historical low levels almost everywhere.\"\n- Inflation trajectory:\n - \"Inflation is receding throughout the region\" and is projected to \"continue falling during this year.\"\n - Decline attributed to \"swift actions of the region's central banks,\" \"the global disinflation trend,\" and normalization of supply-side shocks.\n - Central banks \"have started to reduce rates, although policy rates remain in contractionary territory.\"\n- Policy guidance on monetary easing:\n - \"More policy easing should continue,\" with careful calibration to balance bringing inflation back to target and avoiding undue economic contraction." }, { "heading": "Fiscal policy, public debt, and policy space", "content": "- Public debt context:\n - \"With public debt at high levels, we think that fiscal policy should focus decisively on rebuilding policy space.\"\n - Many countries \"have withdrawn the Pandemic related fiscal stimulus\" but entered the Pandemic with \"high debt from before the Pandemic.\"\n - \"Risks of slippages are increasing as consolidation plans are being postponed.\"\n- Recommendations:\n - \"Faster consolidation is needed to put public debt on a stronger footing.\"\n - \"Timely fiscal tightening will also allow for faster normalization of the monetary policy mix.\"\n - Fiscal adjustment should include \"revenue mobilization to protect key social spending.\"\n - \"Maintaining social cohesion should be a centerpiece of a fiscal consolidation plan given the region's high, still levels of poverty and inequality.\"" }, { "heading": "Structural reforms to raise potential output", "content": "- Medium-term growth outlook:\n - \"The region's medium-term growth is projected to average about 2 percent in the next few years, and this is well, well below the growth rate of peer economies in other regions.\"\n - [Reference to region in the sentence above refers to: Brazil, Chile, Colombia, Mexico, Paraguay, Peru, and Uruguay.]\n- Policy priorities to boost potential output:\n - \"Identify structural reforms with high growth payoffs and build political consensus to implement them durably and inclusively.\"\n - Key reform areas: strengthen governance, improve the business environment, raise historically low investment levels.\n - \"Comprehensive and well sequenced climate change strategies\" including investment in green minerals and energy sectors.\n - Labor market reforms: raise participation rates amid slowing population growth and aging, \"including tackling gender gaps,\" reduce informality, foster firm growth.\n - Security: \"reducing crime and violence ... would also have substantial socioeconomic gains.\"" }, { "heading": "Remittances, gold, and external environment", "content": "- Remittances:\n - Remittances \"have been very strong in the last few years\" and \"have been much more durable than expected,\" supported by a strong U.S. economy.\n- Gold and commodities:\n - Market observations raised by press: \"The price gold is $2,394 by ounce today.\"\n - Over the last 12 months, gold \"raises like more than 12 percent.\"\n - Market purchases cited: \"the market bought like 4,900 tons the whole year.\"\n - IMF comment: global commodity and inflation movements can affect gold prices, but future gold prices are uncertain." }, { "heading": "Country-specific highlights and program engagement", "content": "- Argentina:\n - Program progress: \"The authority Stabilization Plan has yielded better results than we anticipated\": \"the first fiscal surplus over a decade,\" reserves being rebuilt, central bank balance sheet strengthened, inflation \"coming down more quickly than we anticipated.\"\n - Program dialogue: IMF and Argentine authorities are \"working to complete the 8th review of the existing Fund supported program.\"\n - Foreign Currency Liquidity (FCL) and repayments:\n - Argentina \"drew the FCL in 2020\" and \"they will continue their longstanding plan to meet the repayment obligations to the Fund as scheduled initially.\"\n - Repayments \"had already programmed these repayments in the budget for this and next year.\"\n - Authorities have \"reiterated their request of a new FCL for purely precautionary purposes\" expected to be considered by the IMF Board in the coming weeks.\n - Exchange rate and capital controls:\n - Any unwinding of FX controls \"will need to be carefully considered\" in light of remaining imbalances, reserve buffers, and sequencing across measures.\n - On equilibrium real exchange rate: \"critical that at the end policies have to be consistent and that includes the level of the real effective exchange rate, although it's a result, not a policy.\"\n - On growth targets and removal of capital controls: IMF commentary emphasized sequencing and cautioned that unwinding controls is not a single-step action; no categorical yes/no that exit from controls is a necessary condition for a specific growth target.\n\n- Mexico:\n - Performance: \"Mexico is growing more than we had expected in the past\" and benefits from proximity to the U.S. amid changing trade dynamics.\n - Risks and constraints: bottlenecks in energy and infrastructure noted; fiscal policy described as \"procyclical this year\" with \"considerable consolidation towards 2025\" expected.\n - Exchange rate movements: recent peso fluctuations partly reflect markets reassessing the timing of U.S. rate cuts; floating exchange-rate frameworks act as a shock absorber by design.\n\n- Ecuador:\n - Program negotiations: IMF \"actively engaged with authorities\" and \"making good progress in the program negotiations,\" with outcomes to be informed in due course.\n - Recent events: IMF \"following very closely the recent events in the embassy, in the Mexican embassy in Ecuador\" and expects diplomatic resolution in line with international norms.\n - Constitutional court/debt limits: authorities have raised domestic legal constraints; IMF is engaged but no program details or commitments were disclosed in the briefing.\n\n- El Salvador:\n - Performance: \"El Salvador did very well last year. Growth was higher than expected, the fiscal results were better than expected.\"\n - Program discussions: IMF \"would like to see the implementations of several recommendations\" including composition of fiscal consolidation and governance reforms.\n - Bitcoin: \"the legal status of bitcoin\" and associated risks \"is part of the discussion for us\" and measures to address those risks are important.\n - Bond issuance: IMF \"was not consulted and we haven't endorsed that operation.\" The bond was an operation between the country and the private sector.\n\n- Haiti:\n - Engagement: IMF has a \"staff monitoring program\" and is closely engaged.\n - Security and macro outlook: restoring security is a precondition for macro stability and growth; IMF projection: \"We are projecting 3 percent negative growth this year.\"\n\n- Caribbean region (general) and small states:\n - Recovery: Caribbean economies, particularly tourism-dependent ones, \"rebounded very quickly and are normalizing.\"\n - Drivers: tourism rebound is a key driver; outcomes vary across countries.\n - Vulnerability and classification: no current plans \"to change our definitions of which country is either -- which is not one who has concessional lending\"; discussion on additional measures of vulnerability is ongoing.\n - Policy advice: emphasize building fiscal space and buffers to prepare for natural disasters; adapt program design to vulnerability.\n - St. Kitts/Nevis: IMF expects the economy to \"continue to grow by 3 percent on average in the medium run.\" Reserves described as \"five months of import\" in context of regional reserve coverage.\n - Diversification recommendations: advance renewable energy transition, increase investment in water/infrastructure/climate adaptation, better target current expenditures, and pursue tax reform and revenue mobilization to reduce reliance on citizenship-by-investment revenues.\n\n- Chile:\n - Crime and investment: rising organized crime is a concern that can be detrimental to growth; IMF work shows \"security weaknesses are detrimental to growth.\"\n - Growth forecast timing: IMF noted its published forecast may miss late data releases (e.g., February GDP) and could be revised upward; the REO forecast cited \"2 percent\" for Chile in context of recent data.\n\n- Honduras:\n - Performance: \"Honduras also has done well, better than expected.\"\n - Reserves and policy: reserves at \"five months of import\" (regional context earlier), fiscal policy \"in line with the program,\" and structural reforms have been advanced.\n - Recommendations: improve quality of fiscal policy with more investment and better-targeted current spending." }, { "heading": "IMF role, assistance, and operational notes", "content": "- IMF support: \"We stand ready to help to support all countries in the region through our policy advice, capacity development, and financial assistance.\"\n- Program design: IMF emphasizes flexibility in program design to account for country vulnerability and stresses sequencing of reforms, particularly for capital account and FX policy changes.\n- Communications and next steps: ongoing Article IVs, program reviews (e.g., Argentina 8th review), and continued engagement across countries mentioned; outcomes will be shared in due course." }, { "heading": "Key policy recommendations (summary)", "content": "- Rebuild fiscal policy space via timely consolidation and revenue mobilization while protecting social spending.\n- Continue calibrated monetary easing as inflation recedes, ensuring pace balances inflation objectives and growth.\n- Implement structural reforms to raise potential growth: governance, business environment, investment, climate strategy, and labor force participation (including gender gaps).\n- Strengthen resilience in small states and the Caribbean by building buffers, investing in climate adaptation, and tailoring program support to vulnerabilities.\n- Address security and crime as part of the growth-enhancing agenda.\n\nIMF Communications Department, Transcript of Western Hemisphere Department April 19, 2024 Press Briefing.\n\n---\n\n\n References\n\n- Argentina and the IMF\n- Chile and the IMF\n- Colombia and the IMF\n- Ecuador and the IMF\n- El Salvador and the IMF\n- Haiti and the IMF\n- Honduras and the IMF\n- Mexico and the IMF\n- Gold in the IMF -- A Factsheet\n- Transcripts\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/04/19/tr041924-transcript-of-western-hemisphere-april-2024-press-briefing" } ], "bullets": [ "[Markdown version](/en/news/articles/2024/04/19/tr041924-transcript-of-western-hemisphere-april-2024-press-briefing/index.md)", "[Structured JSON version](/en/news/articles/2024/04/19/tr041924-transcript-of-western-hemisphere-april-2024-press-briefing/index.json)", "[Bundle manifest](/en/news/articles/2024/04/19/tr041924-transcript-of-western-hemisphere-april-2024-press-briefing/bundle-manifest.json)", "Published: April 19, 2024", "The region \"has showed quite a bit of resilience\" with a stronger-than-expected rebound from the Pandemic attributable partly to progress in strengthening macroeconomic frameworks.", "With most economies operating near potential, activity has been \"generally moderating in recent quarters.\"", "Growth projection: slowing from \"2.3 percent that the region grew in 2023 to 2 percent this year.\"", "Risk assessment: \"We see risk around this baseline projection as broadly balanced.\"", "Labor markets: \"unemployment still at historical low levels almost everywhere.\"", "Inflation trajectory:", "Policy guidance on monetary easing:", "Public debt context:", "Recommendations:", "Medium-term growth outlook:", "Policy priorities to boost potential output:", "Remittances:", "Gold and commodities:", "Argentina:", "Mexico:", "Ecuador:", "El Salvador:", "Haiti:", "Caribbean region (general) and small states:", "Chile:", "Honduras:", "IMF support: \"We stand ready to help to support all countries in the region through our policy advice, capacity development, and financial assistance.\"", "Program design: IMF emphasizes flexibility in program design to account for country vulnerability and stresses sequencing of reforms, particularly for capital account and FX policy changes.", "Communications and next steps: ongoing Article IVs, program reviews (e.g., Argentina 8th review), and continued engagement across countries mentioned; outcomes will be shared in due course.", "Rebuild fiscal policy space via timely consolidation and revenue mobilization while protecting social spending.", "Continue calibrated monetary easing as inflation recedes, ensuring pace balances inflation objectives and growth.", "Implement structural reforms to raise potential growth: governance, business environment, investment, climate strategy, and labor force participation (including gender gaps).", "Strengthen resilience in small states and the Caribbean by building buffers, investing in climate adaptation, and tailoring program support to vulnerabilities.", "Address security and crime as part of the growth-enhancing agenda.", "[Argentina and the IMF](http://www.imf.org/external/country/ARG/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)", "[El Salvador and the IMF](http://www.imf.org/external/country/SLV/index.htm)", "[Haiti and the IMF](http://www.imf.org/external/country/HTI/index.htm)", "[Honduras and the IMF](http://www.imf.org/external/country/HND/index.htm)", "[Mexico and the IMF](http://www.imf.org/external/country/MEX/index.htm)", "[Gold in the IMF -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2022/gold-in-the-imf)", "[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/2024/04/19/tr041924-transcript-of-western-hemisphere-april-2024-press-briefing/index.md", "json": "/en/news/articles/2024/04/19/tr041924-transcript-of-western-hemisphere-april-2024-press-briefing/index.json", "bundleManifest": "/en/news/articles/2024/04/19/tr041924-transcript-of-western-hemisphere-april-2024-press-briefing/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T02:55:33.908Z" }