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IMF / LATIN AMERICA AND THE CARIBBEAN OUTLOOK
STORY: IMF / LATIN AMERICA AND THE CARIBBEAN OUTLOOK
TRT: 2.13
SOURCE: IMF
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / SPANISH / NATS
DATELINE: RECENT, WASHINGTON, DC / FILE
FILE – RECENT, SAO PAULO, BRAZIL
1. Various shots, traffic
RECENT, WASHINGTON, DC
2. SOUNDBITE (English) Alejandro Werner, Director, Western Hemisphere Department, IMF:
“For 2013, we are expecting a year that growth is going to post 3.4 percent for the region as a whole, compared with 3 percent in 2012. That encompasses some countries that will be growing at around nine percent, such as Panama, and countries that will be growing much less.”
FILE – RECENT, SAO PAULO, BRAZIL
3. Various shots, people shopping
4. Med shot, store windows
RECENT, WASHINGTON, DC
5. SOUNDBITE (English) Alejandro Werner, Director, Western Hemisphere Department, IMF:
“In 2013 for Brazil we are expecting an increase in its growth rates of around three percent this year, which is higher than the growth rate in 2012 that was approximately of 1 percent that basically reflects a lot of stimulus and measures taken in 2012 that are going to pay off in 2013. To maintain those growth rates and above all to increase them in the coming years Brazil will have to accelerate the execution of it’s infrastructure agenda to attack the bottle necks in that sector and also accelerate some structural reforms to trigger productivity in the country.”
FILE / RECENT, MEXICO CITY, MEXICO
6. Wide shot, public building
7. Close up, Mexican flag
8. Wide shot, pedestrian street
RECENT, WASHINGTON, DC
9. SOUNDBITE (English) Alejandro Werner, Director, Western Hemisphere Department, IMF:
“Mexico has been benefitting from the recovery of growth in the U.S. -- and especially the recovery of the manufacturing sector in the U.S., and, therefore, exports have been doing quite well in the last few years. They have been supported, also, by low natural gas prices in North America, by lower labor cost relative to China than the ones we observed, let's say, 10 years ago and also by a significant reduction in transport costs and logistical advantages in an integrated manufacturing platform in North America.”
FILE / RECENT, MEXICO CITY, MEXICO
10. Wide shot, Plaza de la Independencia
11. Wide shot, plaza de la Constitution
12. Wide shot, pedestrian street
Growth in Latin America and the Caribbean is set to pick up from 3 percent in 2012 to 3 and a half percent in 2013, supported by stronger external demand, favorable financing conditions, and the effects of earlier policy easing in some countries, the IMF said.
“For 2013, we are expecting a year that growth is going to post 3.4 percent for the region as a whole, compared with 3 percent in 2012. That encompasses some countries that will be growing at around nine percent, such as Panama, and countries that will be growing much less,” said Alejandro Werner, Director of the Western Hemisphere Department of the IMF.
In its Regional Economic Outlook for the region, released on May 6 in Montevideo, Uruguay, the IMF said that external risks to the near-term outlook have receded. Policy actions in the euro area and the United States have removed immediate threats to global growth and financial stability, the report said.
A deterioration of the crisis in Europe or, in the United States, failure to replace the automatic fiscal spending cuts (“the sequester”) with measures that take effect later would affect growth in late 2013 and beyond.
According to the report, the key risk for the region would be a reversal of the easy financing conditions and strong commodity prices that have prevailed since 2010. The region would be particularly affected if a sharp slowdown in China or other key economies triggers a drop in commodity prices.
The report said that countries in the region should take advantage of the current favorable economic conditions to build a strong foundation for sustained growth in the future. Policy priorities include building stronger fiscal buffers, improving policy frameworks, and pressing ahead with structural reforms to increase productivity and potential growth.
Growth in the financially integrated economies is projected at about 4¼ percent in 2013. In Brazil, output growth is expected to recover to 3 percent in 2013 (from 0.9 percent in 2012).
“Brazil is going to increase its rates of growth from around one percent to three percent this year. That basically reflects a lot of stimulus and measures taken in 2012 that are going to pay off in 2013. Moving further into the future, it will be very important to have the infrastructure agenda and the structural reform agenda generating growth at a higher rate than three percent,” Werner said.
Lower U.S. growth would have a negative impact on the region, particularly in Mexico and Central America, where links through trade and remittances are the strongest.
“Mexico has been benefitting from the recovery of growth in the U.S. -- and especially the recovery of the manufacturing sector in the U.S., and, therefore, exports have been doing quite well in the last few years. They have been supported, also, by low natural gas prices in North America, by lower labor cost relative to China than the ones we observed, let's say, 10 years ago and also by a significant reduction in transport costs and logistical advantages in an integrated manufacturing platform in North America,” Werner said.
Growth in the other commodity exporters is expected to increase to 4.6 percent in 2013, from 3.3 percent in 2012. For the energy exporters (Bolivia, Ecuador, and Venezuela), growth is projected to moderate in 2013. The IMF said these countries would benefit from saving a much larger share of their commodity revenues.
Average growth in Central America is expected to remain close to potential in 2013. Looking ahead, the report said that gradual tightening of fiscal policy in these countries would be necessary to reduce fiscal and external imbalances and ensure debt sustainability.
In much of the Caribbean, high debt and weak competitiveness will continue to constrain growth. These economies are projected to expand by about 1¼ percent in 2013 (from ½ percent in 2012), as external demand strengthens gradually. The key challenge for these countries remains reducing high public debt, containing external imbalances, and reducing financial sector vulnerabilities.
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