Posted on May 25, 2016 by iMFdirect
By Carlos Caceres and Fabiano Rodrigues Bastos
Versions in Português (Portuguese) and Español (Spanish)
The rapid increase in Latin American corporate debt—fueled by an abundance of cheap foreign money during the past decade—has contributed to an increase in corporate risk. Total debt of nonfinancial firms in Latin America increased from US$170 billion in 2010 to US$383 billion in 2015. With potential growth across countries in the region slowing, in line with the end of the commodity supercycle, it will now be more difficult for firms to operate under increased debt burdens and reduced safety margins.
In this environment, Latin American firms are walking a tightrope. With external financial conditions tightening, the walk towards the other side—notably through adjustment and deleveraging—while necessary, has become riskier. After making good progress, the crossing has also become more perilous due to strong headwinds—including slower global demand and bouts of heightened market volatility. Continue reading
Filed under: Emerging Markets, Fiscal, IMF, International Monetary Fund, Latin America | Tagged: Argentina, Brazil, Chile, Colombia, Corporate Risk, credit default swaps, financial volatility, IMF, International Monetary Fund, Mexico, Panama, Peru | Leave a comment »
Posted on May 11, 2016 by iMFdirect
By Yan Carrière-Swallow and Bertrand Gruss
(Versions in Español and Português)
Falling global commodity prices and the normalization of monetary policy in the United States have contributed to widespread currency depreciations in Latin America. In theory, a falling currency is expected to create inflation by driving up the price of imported goods and services—triggering what economists call exchange rate pass-through.
Filed under: Advanced Economies, banking, inflation, International Monetary Fund, Latin America | Tagged: advanced economies, central banks, Diálogo a Fondo, exchange rate pass-through, exchange rate regimes, IMF, inflation, inflation targeting, infrastructure, International Monetary Fund, Latin America, monetary policy, wages | Leave a comment »
Posted on May 3, 2016 by iMFdirect
By Prakash Loungani and Zidong An
Version in Español (Spanish)
Forecasts of real GDP growth attract a lot of media attention. But what matters more to the person on the street is how growth translates into jobs. Unfortunately, the mediocre growth outlook of recent years may lead to a disturbing outlook for jobs, particularly among fuel-exporting countries and in the Latin America and Caribbean region.
Filed under: Advanced Economies, Caribbean, developing countries, Emerging Markets, euro zone, Inequality, International Monetary Fund, Latin America, U.S., unemployment | Tagged: Argentina, Brazil, Caribbean, euro area, IMF, inequality, jobs, labor market, Latin America, Okun coefficient, poverty, unemployment, United States, Venezuela, World Economic Outlook | Leave a comment »
Posted on April 19, 2016 by iMFdirect
Public capital—road, bridges, electricity—can make countries richer by attracting more investment and building economic growth at a time when many are struggling with low growth. Many economists would argue public investment projects in highly efficient countries tend to have a greater impact on growth. New research by IMF economists shows that’s not necessarily the case. Continue reading
Filed under: Advanced Economies, Africa, Asia, Caribbean, China, Economic research, growth, IMF, International Monetary Fund, Latin America, LICs, Low-income countries | Tagged: Andy Berg, infrastructure, public spending | Leave a comment »
Posted on January 22, 2016 by iMFdirect
- Alejandro Werner
By Alejandro Werner
(Versions in Español and Português)
It’s been a rough start to 2016, as seen by the recent bouts of financial volatility, stemming from uncertainties related to the slowdown in China, lower commodity prices, and divergent monetary policy in advanced economies.
The global recovery continues to struggle to gain its footing, with strains in some large emerging market economies weighing on growth prospects. For Latin America and the Caribbean, growth in 2016 is now expected to be negative for the second consecutive year—the first time since the debt crisis of 1982–83, which triggered the “lost decade” for the region (see table). Continue reading
Filed under: Caribbean, Economic outlook, growth, IMF, Latin America | Tagged: Caribbean, Central Am, commodity prices, financial volatility, growth, IMF, Latin America, macroeconomic imbalances, Mercosur, oil prices, South America | Leave a comment »
Posted on December 10, 2015 by iMFdirect
World leaders are meeting in Paris to forge a new climate deal. We interviewed two leading thinkers on climate, Nick Stern and Christiana Figueres.
Filed under: Advanced Economies, Africa, climate change, Emerging Markets, Europe, Finance, Fiscal policy, Globalization, Government, growth, IMF, Inequality, International Monetary Fund, Latin America, Low-income countries, Reform | Tagged: Christiana Figueres, Nick Stern | Leave a comment »