The International Monetary Fund said Thursday it expected Latin America would grow 3 percent in 2014, up from 2.6 percent last year, although it warned of more “turbulence” in the region in the coming months.
“While growth is picking up, we should expect more turbulence for our region. Hence, policy makers in Latin America and the Caribbean should not rest easy just yet,” Alejandro Werner, the IMF’s director for the Western Hemisphere, said here in a statement, referring to recent volatility in emerging markets.
He attributed that turmoil in Latin America to a rolling-back of the U.S. Federal Reserve’s stimulus measures and the “rebalancing” of China’s growth model.
The IMF expects Mexico to grow 3 percent in 2014 thanks to a continued U.S. “recovery” and a “bounce” in the Latin American country’s manufacturing exports.
The Fund said it had a mixed outlook for South America.
It expects the “large, financially open commodity exporters (Brazil, Chile, Colombia, Peru, and Uruguay)” to grow at slightly less than 4 percent.
Among that group, Brazil’s economy is projected to expand at the slowest clip - just 2.3 percent - this year, virtually unchanged from 2013. The IMF said the South American giant was “running up against supply bottlenecks that are constraining output and pushing up inflation.”
On the other hand, the Fund said other commodity exporters such as Argentina and Venezuela were facing “less favorable” scenarios due to “pressures on inflation, the balance of payments, and foreign exchange markets.”