IMF: Good projections for the chilean economy

4.9 percent will grow the chilean economy in 2012, acording to the World Economic Outlook report, published by the International Monetary Fund (IMF) analyzing global and regional situations.  In the same report, the organism projects a 4.6 percent in 2014 in the same indicator for our country, giving a positive perspective in the evolution of this macroeconomic indicator for the next two years.

Considering the numbers for all the region, the document says that Real GDP growth in the Latin America and Caribbean region declined to 3 percent in 2012, from 4.5 percent in 2011, reflecting a slowdown in external demand and, in some cases, the impact of domestic factors. The deceleration was particularly pronounced in Brazil, the region’s largest economy, where large policy stimulus failed to spur private investment.  However, real GDP growth in the zone is projected to increase to 3.4 percent in 2013.

In the case of Chile, IMF expects a results of 2.1 percent in the Consumer Price for 2013 and a 6.5 percent in the Unemployment Rate for the same year.

GLOBAL ECONOMIES

The report forecasts real global GDP growth of 3.3 percent on an annual average basis in 2013, about the same as the 3.2 percent growth seen in 2012, and the IMF expects growth to rise to 4 percent in 2014 (see table below). The WEO says the main reason behind the broadly unchanged growth prospects this year is that advanced economies have not all benefited to the same extent from the improved financial market conditions and confidence. Fiscal brakes in some countries were another important factor.

Private demand in the United States has been showing strength as credit and housing markets heal. But larger-than-expected fiscal adjustment is projected to keep real GDP growth to about 2 percent in 2013.

In the euro area, real GDP is projected to contract by about ¼ percent this year before growing again in 2014. Credit channels are broken: better financial conditions are not yet passing through to companies and households because banks are still hobbled by poor profitability and low capital. Other brakes on growth in the euro area include continued fiscal adjustment, competitiveness problems, and balance sheet weaknesses.

In Japan, new fiscal and monetary stimulus is expected to drive a rebound in activity, with real GDP growth reaching 1½ percent in 2013.

EMERGING MARKETS

About the Emerging Markets, the report says: "growth in emerging market and developing economies is expected to remain robust, strengthening from about 5 percent in 2012 to 5¼ percent in 2013 and 5¾ percent in 2014. Activity in most of these economies has already picked up after a slowdown in 2012, thanks to resilient consumer demand, supportive macroeconomic policies, and a revival of exports. In emerging Europe, the recovery should gain speed as demand from advanced economies in Europe picks up. However, some economies in the Middle East and North Africa continue to struggle with difficult internal transitions."

In general, global economic conditions have improved during the past six months. Advanced economy policymakers successfully defused two of the biggest short-term risks to global activity—the threat of a euro area breakup and a sharp fiscal contraction in the United States. Financial markets have rallied in response, and financial stability has improved, according to the IMF’s latest World Economic Outlook (WEO).

	Real GDP Projections		Consumer Prices
	2013	2014	2013	2014
South America	3.4	3.1	7.2	6.7
Brazil	3.0	4.0	6.1	4.7
Argentina	2.8	3.5	9.8	10.1
Colombia	4.1	4.5	2.2	3.0
Venezuela	0.1	2.3	27.3	27.6
Peru	6.3	6.1	2.1	2.3
Chile	4.9	4.6	2.1	3.0
Ecuador	4.4	3.9	4.7	4.1
Bolivia	4.8	5.0	4.6	4.3
Uruguay	3.8	4.0	7.3	7.2
Paraguay	11.0	4.6	3.6	5.0