(Reuters) - The International Monetary Fund raised its 2023 output growth estimate for Latin America and the Caribbean to 2.3% from July's 1.9% due to faster expected growth in Brazil and Mexico, the fund said in a report on Tuesday.
The 2.3% estimate for 2023 follows growth of 4.1% last year, said the IMF, with the slowdown due to a "normalization of growth along with the effect of tighter policies, a weaker external environment, and lower commodity prices."
Strong agriculture and services sector activity in the first half of 2023 was behind the IMF's upward growth revision of Brazil's output to 3.1% from 2.1% in July.
"Consumption has also remained strong, supported by fiscal stimulus," the IMF wrote in its World Economic Outlook update.
Mexico's growth was last week revised upward by 0.6 percentage points to 3.2%, with the IMF citing a post-pandemic recovery taking hold in construction and services, while the economy still saw benefits from U.S. demand.
The major regional economies expected to see a contraction this year are Argentina, with a -2.5% GDP growth estimate and Chile, with -0.5%, the IMF said.