Question

Planteamientos del FMI

Answer 1

In South America, for those countries with robust growth, the dangers of overheating have declined but have not completely disappeared, particularly when production is above potential and domestic demand remains strong. However, countries with credible monetary policy frameworks, where inflation expectations are well anchored, may pause and, later on, consider easing monetary policy if the scenario worsens and prospects for inflation decrease. On the other hand, gradual fiscal consolidation must continue to create room for maneuver to counteract a more severe decline and preserve that well-earned fiscal credibility. In addition, macro prudential policies continue to be an important part of the set of policy tools