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IMF / LATIN AMERICA ECONOMIES
STORY: IMF / LATIN AMERICA ECONOMIES
TRT:01:57
SOURCE: IMF
RESTRICTIONS: NONE
LANGUAGE: SPANISH / ENGLISH / NATS
DATELINE: 11 OCTOBER 2013, WASHINGTON DC, UNITED STATES
1. Wide shot, Western Hemisphere Department briefing
2. Wide shot, reporters
3. SOUNDBITE (Spanish) Alejandro Werner, Director, Western Hemisphere Department, IMF:
“Looking at growth in Brazil, we think that from 2014 and beyond, the economy may begin growing at levels around 3-3.5% or more when the infrastructure projects begin having a positive impact on economic growth.”
4. Close up, reporter asking question
5. SOUNDBITE (Spanish) Alejandro Werner, Director, Western Hemisphere Department, IMF:
“In this environment, we’re seeing that the government has made important advances. In the manufacturing sector we’re seeing an important recovery and global indicators are also pointing in that direction. Because of this, we think that this is a transitory and not a permanent phenomenon.”
6. Wide officials
7. Med shot, reporters
8. SOUNDBITE (Spanish) Alejandro Werner, Director, Western Hemisphere Department, IMF:
“With respect to the dialog with the Argentinean authorities, the dialog has continued. The exchange of information has continued, has been a constructive dialog. With all the information that we have gathered and our understanding of the advances that are being made in the construction of the national CPI, we will be writing our report to the board. That has to be ready in mid-November. And after that the board will eventually schedule their discussion. And, once the board reaches a decision on how to go forward, we will communicate it.”
9. Close up, reporter
10. SOUNDBITE (Spanish) Alejandro Werner, Director, Western Hemisphere Department, IMF:
“I think that the advances that have been made in respect to transparency are very important. I think that fighting corruption within the government by having greater transparency and more involvement from civil society, we’ll make important advances.”
11. Wide shot, presser ends
The economies of Latin America and the Caribbean remain in low gear, held back by a less favorable external environment and, in some cases, domestic supply constraints, the IMF said.
Output in the region is projected to expand by 2¾ percent in 2013, the lowest rate in four years, with domestic demand remaining the main driver.
Going forward, growth will edge up to 3 percent in 2014 as external demand strengthens gradually, but remain below the average growth rate of the last decade, the IMF said in its Regional Economic Outlook Update for the Western Hemisphere, released October 11 in Washington, D.C.
Brazil continued to recover gradually from a slowdown that started in mid-2011, said Alejandro Werner, Director of the IMF’s Western Hemisphere Department. He added the Fund expects to see more growth in 2014 as Brazil’s infrastructure program “begins to have a significant impact on economic growth.”
In the first half of this year, Mexico suffered an unexpectedly sharp downturn in activity, but is already showing “significant progress,” according to Alejandro Werner, Director of the IMF’s Western Hemisphere Department.
In the rest of Latin America, economic activity has moderated.
Growth has been restrained by sluggish external demand and, in some cases, domestic supply constraints, which have proven more binding than previously anticipated. Domestic demand growth is also moderating from cyclical highs.
According to the report, downside risks continue to dominate the outlook. Of particular concern is the possibility of weaker-than-expected growth in large emerging economies. In China, a key market for Latin America’s commodity exports, growth is projected to ease further to 7¼ percent in 2014 from 7½ percent this year. Lower medium-term growth expectations for China have been a key driver of the decline in commodity prices since the beginning of the year, although they remain at relatively high levels from a historical perspective.
Another concern is the uncertainty regarding the pace of normalization of U.S. monetary policy, which may cause new bouts of market volatility and more intense capital outflow pressures. If these risks materialize, policies in emerging markets may have to strike the right balance between supporting domestic demand and containing capital outflows.
And Werner spoke of the IMF’s discussions with Argentina about the reliability of that country’s inflation data.
“With respect to the dialog with the Argentinean authorities, I mean the dialog has continued. The exchange of information has continued, has been a constructive dialog. With all the information that we have gathered and our understanding of the advances that are being made in the construction of the national CPI, we will be writing our report to the board. That has to be ready in mid-November. And after that the board will eventually schedule their discussion. And, once the board reaches a decision on how to go forward, we will communicate it.”
As the twin tailwinds of high commodity prices and very low external financing costs subside, the key challenge for policymakers is to manage a smooth transition to more sustainable growth rates. This adjustment to leaner times requires efforts in several areas, the report pointed out.
Werner also mentioned the importance of tackling corruption in Latin America. He said that enhanced government transparency and greater civil engagement would help countries “move forward in a major way” in tackling corruption.
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