IMF predicts that Latin America will close 2022 with an average deficit of 4.7%

That International Monetary Fund (IMF) estimates that Latin American countries will close 2022 with an average deficit of 4.7% compared to Gross Domestic Product (GDP).

In its “fiscal oversight” report published this Tuesday, April 20, financial institutions also forecast that the region’s average deficit will decrease to 4.2% of GDP in 2023 and 3.4% in 2024.

In the region, the IMF expects wide variation for 2022, ranging from a 7.6% forecast for Brazil to 1.5% for Chile, past 3.2% for Mexico; 3.8% for Argentina; 2.4% for Peru; 4.6% for Colombia; 2.7% for the Dominican Republic and 2.5% for Uruguay.

“Projections for most Latin American countries show much smaller deficit that in 2020 due to the end of the extraordinary fiscal measures imposed by the pandemic and its return economic growth and therefore tax revenue,” he said in an interview with Efe Paul MauroDeputy Director of the IMF’s Department of Financial Affairs.

Regarding the weight of public debt on GDP, IMF projects that it will average 71.7% in the region by 2022, and will remain stable around this figure for the next five years.

Regarding the region’s two largest economies, the IMF estimates a debt/GDP ratio of 91.9% for Brazil this year and 58.4% for Mexico.

According to Mauro, high inflation The unexpected situation in Latin America helped reduce the debt/GDP ratio in the short term in countries financed in their own currencies, but economists caution that it is not a viable way to keep accounts organized in the long run.

Outside of Latin America, the IMF projects that the United States will close 2022 with a public deficit of 4.8%; eurozone, 4.3%; United Kingdom, 4.3%; China, 7.7%; Japan, 7.8%; and India, 9.9%.

Ecuador

In the case of Ecuador, the multilateral estimate is that the economy will grow 2.9% for 2022 and 2.7% for 2023. Last year, the agency predicted economic growth would reach 3.5%.

The IMF forecast was 0.1 points higher than the Central Bank of Ecuador (BCE). Last month, the entity indicated that GDP would grow 2.8% this year.

However, this estimate is below the projection of the World Bank (WB) which projects Ecuador’s growth of 4.3%.

Roderick Gilbert

"Entrepreneur. Internet fanatic. Certified zombie scholar. Friendly troublemaker. Bacon expert."

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