IMF nudges LatAm GDP growth outlook higher

The IMF has revised up its GDP growth forecast for this year for Latin America and the Caribbean.

The multilateral expects the region's economy to expand 1.2%, up from a forecast of 1.0% made in July.

It is expecing a "gradual recovery for the region."

For next year, the forecast remains unchanged at 1.9%, the IMF said in a World Economic Outlook (WEO) report published Tuesday.

"Although growth is holding up well in Central America and strengthening, on average, in the Caribbean, domestic demand continues to underperform in much of the rest of the region, and some idiosyncratic factors are playing a key role in shaping substantially different outlooks across countries," the IMF said.

In August the UN's Eclac forecast the region's economy would expand 1.1% this year.

ARGENTINA

Argentina is expected to emerge from recession this year, according to the IMF. Argentina's economy is forecast to expand 2.5% this year and 2.5% next, up from an earlier forecast of 2.4% and 2.25%, respectively.

The government of business friendly Mauricio Macri is pushing through a series of reforms to help strengthen the country's economy.

"In Argentina, growth is projected to rebound to 2.5% in 2017 from last year's recession as higher real wages boost consumption; investment picks up, supported by public works; and exports benefit from stronger external demand," the IMF said.

BRAZIL

The region's biggest economy is also forecast to return to growth: IMF believes it will expand 0.7% this year and 1.5% next, compared with July's forecast of 0.3% and 1.3%, respectively. In April's forecast the economy was projected to grow 0.2% this year and 1.7% next.

"A bumper crop and a boost to consumption, including from allowing workers to draw on savings accumulated in their severance accounts, led to an upward revision of half a percentage point in 2017 relative to the April forecast, but ongoing weakness in investment and an increase in political and policy uncertainty led to a downward revision of the 2018 forecast of 0.2 percentage point," it said.

MEXICO

GDP is forecast to grow at a pace of 2.1% this year, up from July's forecast of 1.9%. The economy is due to expand at the same rate next year, down from 2.0%.

"Despite the uncertainty related to renegotiation of the North American Free Trade Agreement and a downward revision to economic activity in the United States, growth for 2017 has been revised upward by 0.4 percent since the April 2017 WEO, reflecting better-than-expected growth outturns for the first two quarters of the year and a recovery in financial market confidence," it said.

COLOMBIA

2017: 1.7%

2018: 2.8%

CHILE

2017: 1.4%

2018: 2.5%

PERU

2017: 2.7%

2018: 3.8%

The global economy, in comparison, is forecast to grow 3.6% this year and 3.7%, up from earlier forecasts of 3.5% and 3.6%, respectively.

"The global upswing in economic activity is strengthening," IMF said. "But the recovery is not complete: while the baseline outlook is strengthening, growth remains weak in many countries, and inflation is below target in most advanced economies. Commodity exporters, especially of fuel, are particularly hard hit as their adjustment to a sharp stepdown in foreign earnings continues. And while short-term risks are broadly balanced, medium-term risks are still tilted to the downside."