Regional Growth: Buckling Under
LatAm is better prepared for global crisis, and appears relatively comfortable versus Eastern Europe. But it is being hammered more than initially expected.
by Taina Rosa
It is common knowledge that LatAm entered this crisis better
prepared than ever. But that does not mean it is not getting
whipped. Most governments in the region are racing to implement
countercyclical measures aimed at ensuring a soft landing, but
the outlook remains bearish.
To some degree countercyclical policies might help
cushion the blow from the global recession, says Shelly
Shetty, senior director at Fitch. However, she adds that on the
monetary policy side, the aggressiveness of central banks
depends on the pass through impact that currency weakness has
on inflation. On the fiscal side, many LatAm countries are not
in a good position to implement countercyclical measures, adds
Commodities, the bread and butter of LatAm growth, have seen a
dramatic decline, undermining GDP. Prices are expected to
remain in the doldrums for the near future: bad news for
Goldman Sachs says that average...
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