(Reuters) -Economic growth in Latin America and the Caribbean is expected to slow this year partly weighed by political and trade uncertainty and the impact of tariffs, an IMF official said on Friday.
Earlier this week, the International Monetary Fund said it expects economic output growth in Latam and the Caribbean to decelerate in 2025 to 2.0% from last year’s 2.4% expansion. In January, the estimate was for a 2.5% growth rate.
“Today’s economic landscape is shaped by a complex interplay of global factors ranging from tariffs and value chain disruptions to commodity price and financial market volatility, and policy uncertainty,” said in prepared remarks Rodrigo Valdes, head of the IMF’s Western Hemisphere Department.
“The impact of these factors on growth is largely negative,
even if trade diversion could benefit some countries.”
He said even if U.S. tariffs to the region are relatively low, commodity prices could fall weighed by slower global growth.
“With this in mind, we see downside risks to growth and
upside risks to inflation,” Valdes said during the IMF’s regional outlook for Latin America and the Caribbean.
He said the region should allow its currencies to float and absorb external shocks, and that countries must focus on the high public debt levels amid the combination of rising financing costs and low growth.
“Fiscal consolidation should continue without further delays, while protecting priority public investment and social spending. Strengthening current fiscal rules would help deliver on these objectives, enhancing the credibility of policy frameworks,” Valdes said.
(Reporting by Rodrigo Campos; Editing by Alistair Bell)
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