{ "title": "Regional Economic Outlook, Western Hemisphere, October 2024: Rebalancing Policies and Pressing on with Reforms", "publication": "Regional Economic Outlook, October 2024", "sourceUrl": "https://www.imf.org/en/publications/reo/wh/issues/2024/10/25/regional-economic-outlook-western-hemisphere-october-2024", "canonical": "https://www.imf.org/en/publications/reo/wh/issues/2024/10/25/regional-economic-outlook-western-hemisphere-october-2024", "overlayPath": "/en/publications/reo/wh/issues/2024/10/25/regional-economic-outlook-western-hemisphere-october-2024/index.md", "summary": "After successfully weathering a series of shocks, most countries in the region are converging to their (tepid) potential. Growth is expected to moderate in late 2024 and 2025, while inflation is projected to continue easing, although gradually.", "sections": [ { "heading": "Growth, inflation, and convergence", "content": "- After successfully weathering a series of shocks, most countries in the region are converging to their (tepid) potential.\n- Growth is expected to moderate in late 2024 and 2025.\n- Inflation is projected to continue easing, although gradually.\n- Output gaps are mostly closed and inflation is near target in most cases." }, { "heading": "Policy mix: rebalancing fiscal and monetary policy", "content": "- With output and inflation gaps mostly closed but monetary policy still contractionary and public finances in need of strengthening, a further rebalancing of the policy mix is necessary.\n- Fiscal policy:\n - Fiscal consolidation should advance without delay to rebuild buffers while protecting priority public investment and social spending.\n - Strengthening fiscal frameworks will be of paramount importance to maintain debt on a sustainable path given an unfavorable interest rate-growth (‘r-g’) differential.\n- Monetary policy:\n - Most central banks are well placed to proceed with monetary easing.\n - Easing should strike a balance between fending off the risk of reemerging price pressures and avoiding an undue economic contraction.\n- Combined effects:\n - Fiscal consolidation that protects investment and social spending would support the normalization of monetary policy and strengthen credibility and resilience of policy frameworks." }, { "heading": "Medium-term outlook and risks", "content": "- Medium-term growth is expected to remain close to its low historical average.\n- Key structural constraints driving low medium-term growth include:\n - Low investment and productivity growth.\n - Shifting demographics.\n - A notably thin ongoing reform agenda that could lead to a vicious circle of low growth, social discontent, and populist policies.\n- Priority cross-cutting governance improvements:\n - Strengthening the rule of law.\n - Enhancing government effectiveness.\n - Tackling crime." }, { "heading": "Structural reform priorities to boost potential growth", "content": "- Boost capital accumulation:\n - Improve the business environment.\n - Foster competition.\n - Increase international trade.\n - Implement greater and more effective public investment.\n- Labor market and demographic responses:\n - Maintain a dynamic labor force and increase productivity by tackling informality and making formal labor markets more flexible, including to adapt to new technologies.\n - Increase female labor participation to help boost the labor force and offset demographic shifts.\n- Specific labor-market policy recommendations highlighted in accompanying analysis (\"Closing the Gap: Labor Market Participation in Latin America\"):\n - Improve the availability and affordability of childcare.\n - Eliminate asymmetries in parental benefits.\n - Make work schedules more flexible.\n - Incentivize the elderly to remain active longer.\n - More effectively integrate youth into the workforce." }, { "heading": "Public debt dynamics and fiscal sustainability (Latin America focus)", "content": "- Understanding drivers of public debt is paramount to assessing fiscal sustainability risks.\n- The paper \"Public Debt Dynamics in Latin America: Time to Rebuild Buffers and Strengthen Fiscal Frameworks\" finds:\n - Drivers of debt changed substantially over the last two decades.\n - Forces that drove debt down during the commodity price boom reversed once it ended—growth decelerated, and public finances weakened substantially despite compliance with fiscal rules.\n - With many of these forces still at play, maintaining debt on a sustainable path will require strong fiscal discipline.\n\nRegional Economic Outlook, Western Hemisphere, October 2024: Rebalancing Policies and Pressing on with Reforms\n\n---\n\n Content in this bundle\n\n- Anexo On-line 1. O setor bancário em um ambiente de juros altos na América Latina\n - Anexo On-line 1. O setor bancário em um ambiente de juros altos na América Latina (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Anexo On-line 1. O setor bancário em um ambiente de juros altos na América Latina (PDF){rel=\"external\" type=\"application/pdf\"}\n- Anexo On-line 3. Choques climáticos e migração transfronteiriça na América Latina e no Caribe\n - Anexo On-line 3. Choques climáticos e migração transfronteiriça na América Latina e no Caribe (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Anexo On-line 3. Choques climáticos e migração transfronteiriça na América Latina e no Caribe (PDF){rel=\"external\" type=\"application/pdf\"}\n- Anexo On-line 4. A criminalidade e suas consequências macroeconômicas na América Latina e no Caribe\n - Anexo On-line 4. A criminalidade e suas consequências macroeconômicas na América Latina e no Caribe (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Anexo On-line 4. A criminalidade e suas consequências macroeconômicas na América Latina e no Caribe (PDF){rel=\"external\" type=\"application/pdf\"}\n- Anexo On-line 4. A criminalidade e suas consequências macroeconômicas na América Latina e no Caribe\n - Anexo On-line 4. A criminalidade e suas consequências macroeconômicas na América Latina e no Caribe (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Anexo On-line 4. A criminalidade e suas consequências macroeconômicas na América Latina e no Caribe (PDF){rel=\"external\" type=\"application/pdf\"}\n- Western Hemisphere Regional Economic Outlook; Background Paper 1; October 2024\n - Western Hemisphere Regional Economic Outlook; Background Paper 1; October 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Western Hemisphere Regional Economic Outlook; Background Paper 1; October 2024 (PDF){rel=\"external\" type=\"application/pdf\"}\n- backgroundpaper2\n - backgroundpaper2 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - backgroundpaper2 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Western Hemisphere Regional Economic Outlook; Online Annex 1; October 2024\n - Western Hemisphere Regional Economic Outlook; Online Annex 1; October 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Western Hemisphere Regional Economic Outlook; Online Annex 1; October 2024 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Western Hemisphere Regional Economic Outlook; Online Annex 2; October 2024\n - Western Hemisphere Regional Economic Outlook; Online Annex 2; October 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Western Hemisphere Regional Economic Outlook; Online Annex 2; October 2024 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Western Hemisphere Regional Economic Outlook; Online Annex 3; October 2024\n - Western Hemisphere Regional Economic Outlook; Online Annex 3; October 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Western Hemisphere Regional Economic Outlook; Online Annex 3; October 2024 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Western Hemisphere Regional Economic Outlook; Online Annex 4; October 2024\n - Western Hemisphere Regional Economic Outlook; Online Annex 4; October 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Western Hemisphere Regional Economic Outlook; Online Annex 4; October 2024 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Western Hemisphere Regional Economic Outlook; Online Annex 5; October 2024\n - Western Hemisphere Regional Economic Outlook; Online Annex 5; October 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Western Hemisphere Regional Economic Outlook; Online Annex 5; October 2024 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Western Hemisphere Regional Economic Outlook; Online Annex 6; October 2024\n - Western Hemisphere Regional Economic Outlook; Online Annex 6; October 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Western Hemisphere Regional Economic Outlook; Online Annex 6; October 2024 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Western Hemisphere Regional Economic Outlook; Board Presentation; October 2024\n - Western Hemisphere Regional Economic Outlook; Board Presentation; October 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Western Hemisphere Regional Economic Outlook; Board Presentation; October 2024 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Full Report\n - Full Report (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Full Report (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Download Data\n- Press Conference\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/publications/reo/wh/issues/2024/10/25/regional-economic-outlook-western-hemisphere-october-2024" } ], "bullets": [ "[Markdown version](/en/publications/reo/wh/issues/2024/10/25/regional-economic-outlook-western-hemisphere-october-2024/index.md)", "[Structured JSON version](/en/publications/reo/wh/issues/2024/10/25/regional-economic-outlook-western-hemisphere-october-2024/index.json)", "[Bundle manifest](/en/publications/reo/wh/issues/2024/10/25/regional-economic-outlook-western-hemisphere-october-2024/bundle-manifest.json)", "Published: October 25, 2024", "After successfully weathering a series of shocks, most countries in the region are converging to their (tepid) potential.", "Growth is expected to moderate in late 2024 and 2025.", "Inflation is projected to continue easing, although gradually.", "Output gaps are mostly closed and inflation is near target in most cases.", "With output and inflation gaps mostly closed but monetary policy still contractionary and public finances in need of strengthening, a further rebalancing of the policy mix is necessary.", "Fiscal policy:", "Monetary policy:", "Combined effects:", "Medium-term growth is expected to remain close to its low historical average.", "Key structural constraints driving low medium-term growth include:", "Priority cross-cutting governance improvements:", "Boost capital accumulation:", "Labor market and demographic responses:", "Specific labor-market policy recommendations highlighted in accompanying analysis (\"Closing the Gap: Labor Market Participation in Latin America\"):", "Understanding drivers of public debt is paramount to assessing fiscal sustainability risks.", "The paper \"Public Debt Dynamics in Latin America: Time to Rebuild Buffers and Strengthen Fiscal Frameworks\" finds:", "**Anexo On-line 1. O setor bancário em um ambiente de juros altos na América Latina**", "**Anexo On-line 3. Choques climáticos e migração transfronteiriça na América Latina e no Caribe**", "**Anexo On-line 4. A criminalidade e suas consequências macroeconômicas na América Latina e no Caribe**", "**Anexo On-line 4. A criminalidade e suas consequências macroeconômicas na América Latina e no Caribe**", "**Western Hemisphere Regional Economic Outlook; Background Paper 1; October 2024**", "**backgroundpaper2**", "**Western Hemisphere Regional Economic Outlook; Online Annex 1; October 2024**", "**Western Hemisphere Regional Economic Outlook; Online Annex 2; October 2024**", "**Western Hemisphere Regional Economic Outlook; Online Annex 3; October 2024**", "**Western Hemisphere Regional Economic Outlook; Online Annex 4; October 2024**", "**Western Hemisphere Regional Economic Outlook; Online Annex 5; October 2024**", "**Western Hemisphere Regional Economic Outlook; Online Annex 6; October 2024**", "**Western Hemisphere Regional Economic Outlook; Board Presentation; October 2024**", "**Full Report**", "[Download Data](https://data.imf.org/en/datasets/IMF.WHD:WHDREO)", "[Press Conference](https://www.imf.org/en/Videos/view?vid=6363759180112)" ], "related": [ { "title": "Anexo On-line 1. O setor bancário em um ambiente de juros altos na América Latina", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/reo/whd/2023/october/portuguese/onlineannex-1-por.pdf", "summary": { "path": "/-/media/files/publications/reo/whd/2023/october/portuguese/onlineannex-1-por.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/reo/whd/2023/october/portuguese/onlineannex-1-por.pdf", "mime": "application/pdf" } }, { "title": "Anexo On-line 3. Choques climáticos e migração transfronteiriça na América Latina e no Caribe", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/reo/whd/2023/october/portuguese/onlineannex-3-por.pdf", "summary": { "path": "/-/media/files/publications/reo/whd/2023/october/portuguese/onlineannex-3-por.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/reo/whd/2023/october/portuguese/onlineannex-3-por.pdf", "mime": "application/pdf" } }, { "title": "Anexo On-line 4. A criminalidade e suas consequências macroeconômicas na América Latina e no Caribe", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/reo/whd/2023/october/portuguese/onlineannex-4-por.pdf", "summary": { "path": "/-/media/files/publications/reo/whd/2023/october/portuguese/onlineannex-4-por.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/reo/whd/2023/october/portuguese/onlineannex-4-por.pdf", "mime": "application/pdf" } }, { "title": "Anexo On-line 4. A criminalidade e suas consequências macroeconômicas na América Latina e no Caribe", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/reo/whd/2023/october/portuguese/onlineannex-5-por.pdf", "summary": { "path": "/-/media/files/publications/reo/whd/2023/october/portuguese/onlineannex-5-por.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/reo/whd/2023/october/portuguese/onlineannex-5-por.pdf", "mime": "application/pdf" } }, { "title": "Western Hemisphere Regional Economic Outlook; Background Paper 1; October 2024", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/reo/whd/2024/october/english/backgroundpaper1.pdf", "summary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/backgroundpaper1.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/backgroundpaper1.pdf", "mime": "application/pdf" } }, { "title": "backgroundpaper2", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/reo/whd/2024/october/english/backgroundpaper2.pdf", "summary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/backgroundpaper2.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/backgroundpaper2.pdf", "mime": "application/pdf" } }, { "title": "Western Hemisphere Regional Economic Outlook; Online Annex 1; October 2024", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/reo/whd/2024/october/english/onlineannex1.pdf", "summary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/onlineannex1.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/onlineannex1.pdf", "mime": "application/pdf" } }, { "title": "Western Hemisphere Regional Economic Outlook; Online Annex 2; October 2024", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/reo/whd/2024/october/english/onlineannex2.pdf", "summary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/onlineannex2.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/onlineannex2.pdf", "mime": "application/pdf" } }, { "title": "Western Hemisphere Regional Economic Outlook; Online Annex 3; October 2024", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/reo/whd/2024/october/english/onlineannex3.pdf", "summary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/onlineannex3.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/onlineannex3.pdf", "mime": "application/pdf" } }, { "title": "Western Hemisphere Regional Economic Outlook; Online Annex 4; October 2024", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/reo/whd/2024/october/english/onlineannex4.pdf", "summary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/onlineannex4.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/onlineannex4.pdf", "mime": "application/pdf" } }, { "title": "Western Hemisphere Regional Economic Outlook; Online Annex 5; October 2024", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/reo/whd/2024/october/english/onlineannex5.pdf", "summary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/onlineannex5.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/onlineannex5.pdf", "mime": "application/pdf" } }, { "title": "Western Hemisphere Regional Economic Outlook; Online Annex 6; October 2024", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/reo/whd/2024/october/english/onlineannex6.pdf", "summary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/onlineannex6.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/reo/whd/2024/october/english/onlineannex6.pdf", "mime": "application/pdf" } }, { "title": "Western Hemisphere Regional Economic Outlook; 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