A report of the International Monetary Fund in which the organization collects its global projections includes a world map that it uses to represent the evolution of the real economy in emerging markets.

In its map, the IMF paints Latin America whole pink and red. It is not a good sign because the activity in the region slowed down significantly at the start of 2019, to the point that the forecast for the whole of the year is to stagnate at 0.2%.

This “synchronized” slowdown is even greater than expected only three months ago, when an anemic growth of 0.6% was already projected.

With that world map as a guide to understand the situation on the continent, it is easier to identify where the hot spots are for the worst economic forecasts: Mexico, Ecuador, Argentina and Venezuela.

The IMF, in every case, is confident that economic activity will rebound to 1.8% in 2020 although it will be half a point lower than anticipated and such an achievement is uncertain.

Brazil, the largest Latin American economy, saw its growth contracted the first three months of the year due to the impact of a mining disaster. The IMF indicates, however, that it managed to rebound in the second half of the year.

On the contrary, the contraction continued in Argentina during the first half of the year and the risks are clearly downward due to the sharp deterioration of market conditions.

Regarding Mexico, the financial organization explains that economic activity slowed down sharply during the first half of the year due to the high political uncertainty, budgetary measures and the evident takeover of the country by narco cartels that control everything, from the central government to the smallest local governments.

The investment, the report summarizes, remains weak and private consumption moderated due to the weakening of confidence and the rise in the cost of loans.

The situation is extreme in Venezuela, where the “implosion” of its economy continues to have a “devastating impact.”

The yield is being lower than expected also in Chile, considered until recently one of the tigers of the Latin American region. It appears in pink together with Uruguay, Paraguay, Peru, Colombia and Bolivia.

On the tension in Ecuador, the agency affirms that it would like to see that the reforms contemplated in the assistance program “were carried out successfully” to underpin its economy.

At the same time, it describes as “unfortunate” that citizens have to “face this difficult situation” and insists that the intention is “to do the best for the people”.

The firm rebound expected for 2020 reflects a recovery in growth in Brazil and Mexico, as well as a less severe contraction in Argentina and Venezuela.

In any case, the region will continue far from the pace of growth in emerging markets. The IMF expects 3.9% for this group this year and a rebound to 4.6% in 2020.

Gita Gopinath, chief economist of the IMF, warns that there is “considerable uncertainty” around the recovery for these countries, “especially when it is expected that the world’s major economies will continue to slow down further in 2020”. A disruption of the economies of China and the United States could “derail a fragile situation.”

The US maintained the momentum at the start of 2019 although it turned towards a more moderate expansion because the stimulus of the fiscal reduction slowed down and investment has fallen.

The growth that occurs for its economy is of 2.4%, two tenths less than what was anticipated in July. Forecast predict that is will slow down to 2.1% next year.

The US economy, in any case, will grow above the average of 1.7% given for all advanced countries in 2019 and 2020.

The budget pact and the rate reduction compensate for the negative effect of uncertainty over the tariff war. The US will also grow more robustly than Canada, for which the IMF projects 1.5% and 1.8%.

Gopinath reiterates that in order to achieve sustainable growth, “it is important that countries adopt structural reforms to boost productivity, improve resistance and reduce inequality.”

“Reforms in emerging markets are most effective when there is good governance,” concludes the economist, referring to the fight against corruption.

This is not the first and it will certainly not be the last report where the IMF provides a doom and gloom forecast of the world’s economy, in which it does not account for its own fault in driving developing economies for their downturn.

The IMF is a for-profit institution that lends money at very high interest rates and squeezes the life out of countries, sending people, especially the poorest ones, into a deep downward spiral of misery, hunger and death. They did it in Greece and are doing it in Argentina and to a lesser extent in Costa Rica.

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