MEXICO CITY, May 11 (Xinhua) -- Latin American economic recovery in 2018 could be dented by a variety of factors, including the uncertain political climate in countries with upcoming presidential elections, the International Monetary Fund (IMF) said on Friday.
In the latest issue of its periodic report on its website, "Regional Economic Outlook for the Western Hemisphere," the IMF estimates an uptick in regional growth, from 1.3 percent in 2017 to 2 percent in 2018, and 2.8 percent in 2019.
However, "noneconomic factors that could derail" this rebound "include political uncertainty due to upcoming elections in several countries, geopolitical tensions, and extreme weather events," the agency said.
External risks to growth included "a shift towards more protectionist policies and a sudden tightening of global financial conditions."
The region's No. 1 and No. 2 economies, Brazil and Mexico, are both holding highly contested elections this year, in October and July, respectively.
For Brazil, "a key risk ... is that the policy agenda could change following the October presidential election, giving rise to market volatility and greater uncertainty about the medium-term outlook," according to the IMF.
Meanwhile, Mexico stands "to benefit from higher growth in the United States as well as stronger domestic demand," but only after "uncertainty subsides about the outcome of the NAFTA renegotiation, the potential implications of the U.S. tax reform, and Mexico's July presidential election," the agency said.
Negotiations between Mexico, Canada and the United States to update the three-way North American Free Trade Agreement (NAFTA) have taken longer than expected.
To meet these challenges and "secure durable growth that benefits all," the IMF recommends regional policymakers focus on "investing more in people through more efficient spending in education; improving infrastructure, which would also boost other investment in the region."
The agency also advises policymakers to focus on "tackling corruption by improving governance and the business climate; opening up more to trade and financial markets, which can be seen as a step toward greater global integration," among other measures.
