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IMF lowers Latin America growth forecast despite improved global outlook

IMF lowers Latin America growth forecast despite improved global outlook

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The IMF lowered its growth forecast for Latin America on Tuesday (Jan 21), in contrast to the brighter picture it painted of the global economy in its latest world economic outlook update.

The organization revised its October outlook, raising its global GDP growth projection for 2014 by 0.1 percentage points to 3.7%, and maintaining its 2015 forecast of 3.9%. In contrast, the IMF lowered its 2014 forecast for Latin America and the Caribbean by 0.1 points to 3.0% GDP growth and 0.2 points to 3.3% for 2015.

The organization's forecast for Brazil is particularly pessimistic, with projected GDP growth lowered 0.2 percentage points to 2.3% for 2014 and 0.4 percentage points to 2.8% for 2015.

Emerging economies benefited from Chinese demand last year, but in some cases domestic demand has been lower than expected, said the IMF.

In 2014 China is again expected to be the principal motor for emerging economies, with projected growth of 7.5% in 2014 for the Asian country, up from the IMF's October forecast of 7.2%. The ongoing recovery of the world's developed nations is also expected to boost the growth of emerging economies.

Nevertheless, the IMF's pessimistic outlook for Latin America reflects tighter financial conditions and policy stances since mid-2013, as well as political uncertainty and bottlenecks which are holding back investment in the region, according to the report.