- Latin America’s economy continued to struggle at the beginning of the year within a context of subdued global demand related to a gradual transition in the world’s economy
- Latin America is experiencing its first region-wide economic downturn since 2009
- The IMF’s revised World Economic Outlook projected in October that the region’s economy would contract by 0.3% in 2015. This updated the IMF’s previous prediction of 0.5% growth.
- Brazil is contending with a sharp recession
-Other factors include a strengthening US dollar relative to national currencies and weak domestic demand.
- Venezuela is dealing with inflation close to 100%
-As well as recession in Brazil, Mexico has been experiencing slower than expected growth.
Things are expected to improve
- The IMF expects the region to recover in 2016 to expand by 0.8%. The downturn is not expected to have an impact as deep as previous commodity downturns such as the debt crisis of the 1980s.
With some exceptions, Latin American countries have much lower external debt ratios and greater international reserves.