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freeze US $22.6 billion in 2015 budget spending. The government further hiked tax rates for banks, brokerages, and credit card processors from 15 to 20 percent. In its worst downturn in two decades, Brazil’s industrial production fell in November 2015 by more than 12 percent over the same period in 2014.
Unlike Brazil, Argentina’s consumer confidence reached a three-year high in May 2015, and it experienced its mildest decrease in industrial pro- duction in nine months—a positive outlook for the country had Argentina not recently been ordered to pay US $5.4 billion to more than 500 bond- holders for defaulted debt—debt which now totals US $7.0 billion. On the positive side, the United Nations notes that Argentina showed some signs of recovery in 2015 by recording a higher rate of employment through the middle of the year, espe- cially as measured against the pre-financial crisis rate in the fourth quarter of 2007.
Although Brazil and Argentina are experiencing strained economic conditions, they are faring far better than Venezuela, whose government has refused to release official data since the third quarter of 2014. As it stands, the IMF forecasts that Venezuela’s economy will continue its steep decline. The last year that the country had GDP growth was in 2013, and that was minimal at 1.3 percent. By 2014, it had dropped to -4.0 percent, and in 2015, it dropped a projected -8.0 percent. Experts see that number rising to -4.5 percent for 2016.
CENTRAL AMERICA EXCEEDING EXPECTATIONS
Unlike South America, growth is expected to be steady for Central America, partly because the region is so closely tied to the rebounding U.S. economy. The resulting increase in demand for Central American exports means that growth for the region reach a projected 3.0 percent in 2015, and the IMF forecasts that by 2016, Panama
will have the highest GDP growth of the region, reaching 6.4 percent. Other countries expected
to have real GDP growth in 2016 are Belize (2.5 percent), Costa Rica (4.0 percent), El Salvador (2.5 percent), and Honduras (3.4 percent). The World Bank projects that Guatemala will experience a minimal contraction from 3.7 percent in 2015 to 3.6 percent in 2016.
The IMF projected growth for Latin America and the Caribbean (LAC) at 0.9 percent for 2015, down from growth of 1.3 percent in 2014. Economic contractions in Brazil, Argentina, and Venezuela are contributing to the decline in the overall re- gion, with only a handful of countries expected to experience GDP growth above 3 percent in 2015.
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