## Outlook for Latin America and the Caribbean: An Uneven Recovery

_Western Hemisphere, October 12, 2018_

## Source details

**Canonical URL:** [Outlook for Latin America and the Caribbean: An Uneven Recovery](https://www.imf.org/en/publications/reo/wh/issues/2018/10/11/wreo1018)

## Other formats

- [Markdown version](/en/publications/reo/wh/issues/2018/10/11/wreo1018/index.md)
- [Structured JSON version](/en/publications/reo/wh/issues/2018/10/11/wreo1018/index.json)
- [Bundle manifest](/en/publications/reo/wh/issues/2018/10/11/wreo1018/bundle-manifest.json)

## Bibliographic details
- Published: October 12, 2018
- Series: Western Hemisphere

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### Overview and context
- Publication date: October 2018
- Regional backdrop: escalating trade tensions, tighter financial conditions, and volatile commodity markets have moderated and made the recovery more uneven across Latin America and the Caribbean (LAC).

### Key recent developments and country-specific dynamics
- Brazil and Mexico: recovery has slowed.
- Argentina: recovery has come to a halt.
- Central America: higher oil prices coupled with increased political uncertainty have dampened the near-term outlook in several economies.
- Venezuela: there is still no end in sight to the economic and humanitarian crisis.
- Andean economies: better terms of trade over the past year and improvements in consumer and business confidence have provided a fillip to growth prospects in some economies.
- Caribbean: activity is recovering, reflecting the uptick in tourism owing to robust US and global growth.

### Risks and financing constraints
- Downside risks to economic prospects in LAC have risen and potential for upside surprises has receded.
- Major currencies have registered sharp declines.
- Debt levels remain at relatively elevated levels in many economies in the region.
- Scope for near-term countercyclical policy support is generally limited.
- External financing needs are relatively high in some countries and capital flows are ebbing; policymakers should be prepared for further capital outflow pressures.

### Policy guidance and near-term measures
- Exchange rate flexibility will remain key.
- Foreign exchange market intervention could be appropriate under excessive volatility and market dislocation.

### Medium-term reform priorities
- Increase saving and investment rates.
- Reduce misallocation of resources.
- Make labor markets more flexible and reduce informality.
- Liberalize trade.
- Improve the business climate.
- Continue strengthening anti-corruption frameworks.

*Source: Outlook for Latin America and the Caribbean: An Uneven Recovery, October 2018.*

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## Content in this bundle

- **Regional economic Outlook: Western Hemisphere - Background Papers; October 2018**
  - [Regional economic Outlook: Western Hemisphere - Background Papers; October 2018 (Markdown version)](/-/media/files/publications/reo/whd/2018/october/wreo1018-background-papers.pdf.md){rel="alternate" type="text/markdown"}
  - [Regional economic Outlook: Western Hemisphere - Background Papers; October 2018 (PDF)](/-/media/files/publications/reo/whd/2018/october/wreo1018-background-papers.pdf){rel="external" type="application/pdf"}
- **Regional Economic Outlook: Western Hemisphere Region - An Uneven Recovery; October 2018**
  - [Regional Economic Outlook: Western Hemisphere Region - An Uneven Recovery; October 2018 (Markdown version)](/-/media/files/publications/reo/whd/2018/october/wreo1018.pdf.md){rel="alternate" type="text/markdown"}
  - [Regional Economic Outlook: Western Hemisphere Region - An Uneven Recovery; October 2018 (PDF)](/-/media/files/publications/reo/whd/2018/october/wreo1018.pdf){rel="external" type="application/pdf"}

---

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_Source: https://www.imf.org/en/publications/reo/wh/issues/2018/10/11/wreo1018_