The International Monetary Fund said Tuesday that it raised its growth estimate for Latin America and the Caribbean in 2023 to 2.3% from 1.9% calculated in July due to expectations of faster expansion in Brazil and Mexico.
The 2.3% estimate for 2023 follows 4.1% growth last year, the IMF said. This slowdown is due to a “normalization of growth along with the effect of tighter policies, a weaker external environment and lower commodity prices,” he added.
Strong agricultural and services sector activity in the first half of 2023 prompted the IMF’s upward revision of Brazil’s growth to 3.1% from 2.1% in July.
“Consumption has also remained strong, supported by fiscal stimulus,” the agency said in the update of its World Economic Outlook.
Mexico’s growth was revised up 0.6 percentage points to 3.2%, with the IMF attributing it to a post-pandemic recovery that is taking hold in construction and services, as the economy continues to benefit from U.S. demand.
The main regional economies expected to experience a contraction this year are Argentina, with GDP growth estimated at -2.5%, and Chile, with -0.5%, the IMF said.