The International Monetary Fund is forecasting Latin America will enter recession this year for the first time since the end of the global financial crisis as China’s slowdown drives lower demand for the region’s commodities.
The Washington-based lender said in a report Wednesday that Latin American and the Caribbean economies will shrink 0.3 percent this year before rebounding in 2016. It’s the region’s fifth straight year of slowing economic growth.
A deep 10 percent recession in Venezuela and a smaller contraction in once-ballyhooed Brazil are the main drivers of the weaker economic performance.
But the fund says even more-open economies such as Chile and Colombia need to brace for a prolonged slump in commodity prices and undertake long-term reforms to boost productivity.