{ "title": "Regional Economic Outlook: Seizing the Momentum", "publication": "Western Hemisphere, May 9, 2018", "sourceUrl": "https://www.imf.org/en/publications/reo/wh/issues/2018/05/09/wreo0518", "canonical": "https://www.imf.org/en/publications/reo/wh/issues/2018/05/09/wreo0518", "overlayPath": "/en/publications/reo/wh/issues/2018/05/09/wreo0518/index.md", "summary": "The broad-based acceleration of global growth in 2017 is reflected in the solid gains posted by the economies of the United States and Canada, both of which are expected to grow above potential in the near term.", "sections": [ { "heading": "Executive summary and global outlook", "content": "- Broad-based acceleration of global growth in 2017 reflected in solid gains for the United States and Canada; both expected to grow above potential in the near term.\n- Growth in both advanced and emerging market and developing economies expected to gain further momentum in 2018 and 2019, reflecting:\n - effects of expansionary US fiscal policy,\n - favorable global financial conditions,\n - improved prospects for external demand.\n- Near-term risks broadly balanced; medium-term risks tilted to the downside, including:\n - possibility of a sharp tightening of financial conditions,\n - escalating trade tensions and risks of a further shift toward protectionist policies,\n - geopolitical strains.\n- Policy focus recommended: build buffers, improve financial resilience, and strengthen potential for higher and more inclusive growth." }, { "heading": "Chapter 1 — A synchronized global upturn and outlook for the United States and Canada", "content": "- World economy and global trade experiencing a broad-based cyclical upswing; global growth outcomes and the outlook for 2018–19 improved since October 2017.\n- Positive near-term spillovers from US tax policy changes.\n- Favorable global financial conditions supporting recovery despite some tightening and market volatility in February and March.\n- Higher commodity prices improving outlook for commodity exporters.\n- Medium-term prospects tilted downward: subdued growth prospects for advanced economies; many emerging market and developing economies projected to grow in per capita terms more slowly than advanced economies, raising income convergence concerns.\n- Policy implication: build buffers, improve financial resilience, strengthen potential growth and inclusion." }, { "heading": "Chapter 2 — Outlook for Latin America and the Caribbean", "content": "- After a contraction in 2016, growth in Latin America and the Caribbean turned positive in 2017; growth expected to gain further momentum in 2018 and 2019.\n- Recovery broad-based: Mexico, Central America, and parts of the Caribbean benefiting from stronger US growth; uncertainties from US tax reform and NAFTA renegotiations.\n- South America recovery led by end of recessions in Argentina, Brazil, and Ecuador; higher commodity prices; moderation of inflation enabling monetary easing.\n- Remaining challenges:\n - further fiscal consolidation needed in many countries to restore sustainability,\n - calibrate quality, speed, and composition of fiscal adjustment,\n - elections may heighten economic and policy uncertainty.\n- Medium-term structural challenges require comprehensive reform agenda: strengthen institutional and policy frameworks, boost productivity, increase trade and financial liberalization." }, { "heading": "Chapter 3 — Credibility, communication, and monetary policy procyclicality in Latin America", "content": "- Large and persistent exchange rate depreciation has inflationary impacts prompting reexamination of monetary policy responses.\n- Central bank credibility—reflected by anchoring of inflation expectations—critical for policy responses to external shocks.\n- Stronger transparency frameworks and clear communication associated with:\n - more predictable policy decisions,\n - better anchoring of inflation expectations,\n - greater room to maneuver interest rate policy amid transitory inflation shocks." }, { "heading": "Chapter 4 — Fiscal multipliers and consolidation in Latin America and the Caribbean", "content": "- Rising public debt driven by lower global commodity prices, slower growth, and past expansionary policies - need for fiscal consolidation.\n- New database of fiscal policy actions estimates fiscal multipliers in the region to lie between 0.5 and 1.1, suggesting consolidation will be more contractionary than previously thought.\n- Despite contractionary effects, multipliers are small enough to suggest consolidations will improve debt dynamics even in the short run.\n- Heterogeneity of expenditure multipliers implies consolidation plans should preserve public investment to support growth and employment." }, { "heading": "Chapter 5 — Poverty and inequality in Latin America", "content": "- Latin America made impressive progress in reducing inequality and poverty since the turn of the century but remains the most unequal region in the world.\n- Declines in inequality and poverty especially pronounced for commodity exporters during the commodity boom.\n- Much progress reflected real labor income gains for lower-skilled workers, especially in services; government transfers played a smaller but positive role.\n- With the commodity boom over, fiscal tightening, and poverty rates edging up in some countries, policies need recalibration to sustain social progress.\n- Policy options highlighted:\n - increase personal income tax revenues while rebalancing spending,\n - maintain key social transfers and infrastructure spending,\n - better target social transfers,\n - reform decentralization frameworks." }, { "heading": "Key statistics and dated references preserved from source", "content": "- Years and periods: 2016; 2017; 2018; 2019; 2018–19; October 2017; February and March.\n- Fiscal multiplier estimates: between 0.5 and 1.1.\n\nRegional Economic Outlook: Seizing the Momentum — full page overview content\n\n---\n\n Content in this bundle\n\n- Regional Economic Outlook: Western Hemisphere - Chapter 1; April 2018\n - Regional Economic Outlook: Western Hemisphere - Chapter 1; April 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Regional Economic Outlook: Western Hemisphere - Chapter 1; April 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Regional Economic Outlook: Western Hemisphere - Chapter 2; April 2018\n - Regional Economic Outlook: Western Hemisphere - Chapter 2; April 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Regional Economic Outlook: Western Hemisphere - Chapter 2; April 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Regional Economic Outlook: Western Hemisphere - Chapter 3; April 2018\n - Regional Economic Outlook: Western Hemisphere - Chapter 3; April 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Regional Economic Outlook: Western Hemisphere - Chapter 3; April 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Regional Economic Outlook: Western Hemisphere - Chapter 4; April 2018\n - Regional Economic Outlook: Western Hemisphere - Chapter 4; April 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Regional Economic Outlook: Western Hemisphere - Chapter 4; April 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Regional Economic Outlook: Western Hemisphere - Chapter 5; April 2018\n - Regional Economic Outlook: Western Hemisphere - Chapter 5; April 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Regional Economic Outlook: Western Hemisphere - Chapter 5; April 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Regional Economic Outlook: Western Hemisphere - Executive Summary; April 2018\n - Regional Economic Outlook: Western Hemisphere - Executive Summary; April 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Regional Economic Outlook: Western Hemisphere - Executive Summary; April 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Regional Economic Outlook: Western Hemisphere - Seizing the Momentum; April 2018\n - Regional Economic Outlook: Western Hemisphere - Seizing the Momentum; April 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Regional Economic Outlook: Western Hemisphere - Seizing the Momentum; April 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website.\n- Modify your profile\n- https://www.imf.org/en/publications/weo\n- Global Economy in Crosscurrents of War and Technology\n- https://www.imf.org/en/publications/gfsr\n- Global Financial Markets Confront the War in the Middle East and Amplification Risks\n- https://www.imf.org/en/publications/fm\n- Fiscal Policy under Pressure: High Debt, Rising Risks\n- https://www.imf.org/en/publications/reo\n- Asia and Pacific\n- Europe\n- Middle East and Central Asia\n- Sub-Saharan Africa\n- Western Hemisphere\n- https://www.imf.org/en/publications/areb\n- Getting to Growth in an Age of Uncertainty\n- https://www.imf.org/en/publications/finance-development\n- More Publications\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/publications/reo/wh/issues/2018/05/09/wreo0518" } ], "bullets": [ "[Markdown version](/en/publications/reo/wh/issues/2018/05/09/wreo0518/index.md)", "[Structured JSON version](/en/publications/reo/wh/issues/2018/05/09/wreo0518/index.json)", "[Bundle manifest](/en/publications/reo/wh/issues/2018/05/09/wreo0518/bundle-manifest.json)", "Published: May 9, 2018", "Series: Western Hemisphere", "Broad-based acceleration of global growth in 2017 reflected in solid gains for the United States and Canada; both expected to grow above potential in the near term.", "Growth in both advanced and emerging market and developing economies expected to gain further momentum in 2018 and 2019, reflecting:", "Near-term risks broadly balanced; medium-term risks tilted to the downside, including:", "Policy focus recommended: build buffers, improve financial resilience, and strengthen potential for higher and more inclusive growth.", "World economy and global trade experiencing a broad-based cyclical upswing; global growth outcomes and the outlook for 2018–19 improved since October 2017.", "Positive near-term spillovers from US tax policy changes.", "Favorable global financial conditions supporting recovery despite some tightening and market volatility in February and March.", "Higher commodity prices improving outlook for commodity exporters.", "Medium-term prospects tilted downward: subdued growth prospects for advanced economies; many emerging market and developing economies projected to grow in per capita terms more slowly than advanced economies, raising income convergence concerns.", "Policy implication: build buffers, improve financial resilience, strengthen potential growth and inclusion.", "After a contraction in 2016, growth in Latin America and the Caribbean turned positive in 2017; growth expected to gain further momentum in 2018 and 2019.", "Recovery broad-based: Mexico, Central America, and parts of the Caribbean benefiting from stronger US growth; uncertainties from US tax reform and NAFTA renegotiations.", "South America recovery led by end of recessions in Argentina, Brazil, and Ecuador; higher commodity prices; moderation of inflation enabling monetary easing.", "Remaining challenges:", "Medium-term structural challenges require comprehensive reform agenda: strengthen institutional and policy frameworks, boost productivity, increase trade and financial liberalization.", "Large and persistent exchange rate depreciation has inflationary impacts prompting reexamination of monetary policy responses.", "Central bank credibility—reflected by anchoring of inflation expectations—critical for policy responses to external shocks.", "Stronger transparency frameworks and clear communication associated with:", "Rising public debt driven by lower global commodity prices, slower growth, and past expansionary policies -> need for fiscal consolidation.", "New database of fiscal policy actions estimates fiscal multipliers in the region to lie between 0.5 and 1.1, suggesting consolidation will be more contractionary than previously thought.", "Despite contractionary effects, multipliers are small enough to suggest consolidations will improve debt dynamics even in the short run.", "Heterogeneity of expenditure multipliers implies consolidation plans should preserve public investment to support growth and employment.", "Latin America made impressive progress in reducing inequality and poverty since the turn of the century but remains the most unequal region in the world.", "Declines in inequality and poverty especially pronounced for commodity exporters during the commodity boom.", "Much progress reflected real labor income gains for lower-skilled workers, especially in services; government transfers played a smaller but positive role.", "With the commodity boom over, fiscal tightening, and poverty rates edging up in some countries, policies need recalibration to sustain social progress.", "Policy options highlighted:", "Years and periods: 2016; 2017; 2018; 2019; 2018–19; October 2017; February and March.", "Fiscal multiplier estimates: between 0.5 and 1.1.", "**Regional Economic Outlook: Western Hemisphere - Chapter 1; April 2018**", "**Regional Economic Outlook: Western Hemisphere - Chapter 2; April 2018**", "**Regional Economic Outlook: Western Hemisphere - Chapter 3; April 2018**", "**Regional Economic Outlook: Western Hemisphere - Chapter 4; April 2018**", "**Regional Economic Outlook: Western Hemisphere - Chapter 5; April 2018**", "**Regional Economic Outlook: Western Hemisphere - Executive Summary; April 2018**", "**Regional Economic Outlook: Western Hemisphere - Seizing the Momentum; April 2018**", "[Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website.](https://www.imf.org/en/email-subscription/index)", "[Modify your profile](https://www.imf.org/en/email-subscription/login)", "[https://www.imf.org/en/publications/weo](https://www.imf.org/en/publications/weo)", "[Global Economy in Crosscurrents of War and Technology](https://www.imf.org/en/publications/weo/issues/2026/07/08/world-economic-outlook-update-july-2026)", "[https://www.imf.org/en/publications/gfsr](https://www.imf.org/en/publications/gfsr)", "[Global Financial Markets Confront the War in the Middle East and Amplification Risks](https://www.imf.org/en/publications/gfsr/issues/2026/04/14/global-financial-stability-report-april-2026)", "[https://www.imf.org/en/publications/fm](https://www.imf.org/en/publications/fm)", "[Fiscal Policy under Pressure: High Debt, Rising Risks](https://www.imf.org/en/publications/fm/issues/2026/04/15/fiscal-monitor-april-2026)", "[https://www.imf.org/en/publications/reo](https://www.imf.org/en/publications/reo)", "[Asia and Pacific](https://www.imf.org/en/publications/reo/apac)", "[Europe](https://www.imf.org/en/publications/reo/eu)", "[Middle East and Central Asia](https://www.imf.org/en/publications/reo/meca)", "[Sub-Saharan Africa](https://www.imf.org/en/publications/reo/ssa)", "[Western Hemisphere](https://www.imf.org/en/publications/reo/wh)", "[https://www.imf.org/en/publications/areb](https://www.imf.org/en/publications/areb)", "[Getting to Growth in an Age of Uncertainty](https://www.imf.org/en/publications/areb/issues/2025/09/24/annual-report-2025)", "[https://www.imf.org/en/publications/finance-development](https://www.imf.org/en/publications/finance-development)", "[More Publications](https://www.imf.org/en/publications)" ], "related": [ { "title": "Regional Economic Outlook: Western Hemisphere - Chapter 1; 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