Economic Forcast

The International Monetary Fund released their World Economic Outlook, which contains revised predictions for economic growth in 2016.

Central America and the Caribbean are projected to grow 3.9 and 3.4 percent, respectively. All countries in Central America other than Belize (0.0 percent predicted) are predicted to grow between 2.4 (El Salvador) and 5.2 (Panama) percent this year.

In the Caribbean, St. Kitts and Nevis and the Dominican Republic are predicted to grow the most in 2016 at 3.5 and 5.9 percent, respectively. Only the economies of Puerto Rico and Trinidad and Tobago is expected to contact in 2016: 0.2 and 2.7 percent, respectively.

The IMF projects that South America will contract 2.0 percent in 2016. Among South American countries, Brazil, Suriname, and Venezuela are predicted to contract by 3.3, 7.0, and 10 percent, respectively, while Ecuador, Peru, and Guyana are predicted to grow by 3.7, 3.7, and 4.0 percent, respectively.

Inflation

The government of Argentina expects inflation in 2016 to be higher than desired. Reuters reports that Mario Quintana, Deputy of the Cabinet of Ministers of Argentina, told Radio La Red, “It is false that inflation in 2016 will be close to 40 percent. We estimate that it is going to be below that, it could be 35 or 36.” That is significantly higher than the 20 to 25 percent that President Macri in December 2015 said he would seek but close to the level predicted by economists at around the same time.

Trade

Uruguay and Chile signed a free trade agreement this morning. El Observador reports that Foreign Minister Rodolfo Nin Novoa said that the FTA will lead to economic improvements and opportunities for both countries and will not affect the rights of Uruguayan workers.

“We spoke with the unions, we explained the treaty, we gave them a summary and had an instance of communication between the Ministry of Labor and the unions to analyze the labor standards,” said Foreign Minister Nin.

La Tercera reports that the agreement “incorporates new issues like electronic commerce, trade in services, gender and cooperation.”