(Reuters) – The International Monetary Fund 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 keys to the downgrades.
The IMF reduced 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 cut by 0.6 percentage point to 2.4%.
“The fight against inflation has prompted a strong monetary policy response, which will weigh on domestic demand,” the IMF said of Brazil in an update to its World Economic Outlook.
It said Mexico will be somewhat affected by the same market forces, compounded by an expected drop in output growth from the United States, its most important business partner.
“The U.S. (economic growth) downgrade brings with it the prospect of weaker-than-expected external demand for Mexico in 2022,” the IMF said.
(Reporting by Rodrigo Campos; editing by Richard Pullin)
