For Immediate Release
Dan Beeton, 202-239-1460
IMF's Economic Growth Projections for Latin America and Caribbean Appear Questionable
CEPR Co-Director Challenges IMF to Bet $10,000 on its Projections
WASHINGTON - Some of the IMF's economic growth projections
for Latin America and Caribbean countries through 2014 appear
questionable, according to a new issue brief from the Center for
Economic and Policy Research. The issue brief, "Troubled Assets: The IMF's Latest Projections for Economic Growth in the Western Hemisphere"
by economist David Rosnick, finds that for some countries - most
notably Venezuela and Argentina - the IMF's projections inexplicably
portend a prolonged negative impact of the current world recession,
even as countries harder-hit by the downturn, such as Mexico, recover.
In other cases, such as Haiti, the IMF projects a surprisingly big
"Of course the IMF is upset with Venezuela and Argentina because of
these governments' criticisms of the Fund. But that's no reason to
publish implausible economic forecasts for these economies," said CEPR
Co-Director and economist, Mark Weisbrot.
Venezuela grew at an average of 7.1 percent per year from 2002-08, but
the IMF projects it to lose 0.1 percent per year through 2014. Along
with Argentina and Panama, Venezuela has been one of the fastest
growing economies in the Western Hemisphere over the last six years,
yet it is the only country in the region that the IMF anticipates will
not recover by 2014. This projection appears highly improbable,
especially compared to the IMF's projections for Mexico. Although it is
much more heavily dependent on trade with the U.S. than Venezuela is,
the IMF projects that Mexico will grow 2.9 percent per year over the
next six years, after shrinking by 3.7 percent in 2009.
"The forecast for Venezuela is the least believable of all. If anyone
at the IMF wants to put some money on this, I am happy to put up
$10,000 on the bet that Venezuela will have an increase in real GDP
over the next six years," Weisbrot said.
Haiti, at 0.9 percent per year, experienced the slowest growth of any
country in the region since 2002. Yet the IMF is projecting Haiti to
grow an average of 2.8 percent per year for the next six years, placing
it squarely in the middle of the region.
The IMF has a track record
of enormous errors in its economic growth forecasts for both Venezuela
and Argentina. These countries have criticized the IMF in recent years
and have also experienced very rapid growth over the last six years,
contrary to IMF forecasts.
The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.