Prospects for Latin America

The International Monetary Fund (IMF) website is a rich but often neglected source of information on strategic questions. Relatively few people in the British fund industry are likely to be interested in the reports on Bangladesh and Tunisia published this week. But an overall view of Latin America should be useful to emerging market investors.
At a press conference in Washington DC the director of the IMF Western Hemisphere department, Anoop Singh, outlined recent developments in the region. He discussed how Latin America was going to cope with three negative shocks: the freeze in the global credit market, weaker external demand and lower commodity prices. However, its central scenario still forecasts growth of about 3% for the region next year.
Singh also outlined three essential economic priorities for the region in the period ahead. First, it needs to pre-emptively address risks from liquidity and asset quality. Second, it needs to keep inflation expectations well anchored. Finally, it will need a targeted approach to fiscal spending which meets essential needs but contains additional demands.