June 06, 2025
Countries across Latin America should uphold prudent fiscal policies to bolster their economies in the face of rising trade tensions and growing policy uncertainty, Nigel Clarke, Deputy Managing Director of the International Monetary Fund (IMF), told Reuters on Friday.
“Now is not the time to alter policy frameworks or abandon fiscal plans,” Clarke emphasized in a written statement ahead of his visit to Paraguay. There, he will inaugurate a regional training initiative aimed at enhancing analytical and institutional capacity throughout the region.
Clarke acknowledged that Latin America managed the economic fallout from the COVID-19 pandemic better than anticipated, with governments withdrawing emergency support measures in a timely manner. However, he noted that several countries—including Brazil, Chile, Colombia, Mexico, Paraguay, Peru, and Uruguay—have since returned to debt levels comparable to those seen at the height of the pandemic in 2020. This resurgence in debt leaves their economies more vulnerable to market volatility, particularly from developments in the United States, at a time when global growth projections remain uncertain.
“Our message to the countries of Latin America and the Caribbean is clear: continue implementing essential structural reforms and work to strengthen economic resilience,” Clarke said. He also stressed the importance of deepening trade by reducing barriers.
In April, the IMF revised its 2025 growth forecast for Latin America and the Caribbean downward to 2.0%, from 2.4% in 2024 and a January estimate of 2.5%. The downgrade was largely driven by Mexico’s close economic ties with the United States, where new trade tariffs have begun to impact exports.
Clarke’s visit to Paraguay also marks the launch of a new IMF regional training program for South America and Mexico. Hosted by Paraguay’s Central Bank, the initiative will offer eight courses over the next year, beginning with a focus on macroeconomic and fiscal policy.
Source: (Reuters)
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