(Reuters) – The International Monetary Fund (IMF) lowered its 2022 economic growth forecasts for Latin America and its two largest economies, citing inflation, tighter monetary policy and a lower growth estimate for the United States as drivers for the relegations.
The IMF cut its growth expectations for Mexico and Brazil by 1.2 percentage points each to 2.8% and 0.3%, respectively, while the estimate for Latin America and the Caribbean was lowered by 0.6 percentage point, to 2.4%.
“The fight against inflation has led to a strong response of monetary policy, which will weigh on domestic demand,” the IMF said about Brazil in an update of its report World Economic Outlook.
The Fund said Mexico will be affected somewhat by the same market forces, compounded by an expected drop in production growth in the United States, its most important business partner.
“The downgrade (of economic growth) in the US brings with it the prospect of weaker-than-expected external demand for Mexico in 2022,” the IMF said.
(By Rodrigo Campos)
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