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Doubts Emerge over Latin America Economies After the Boom Years

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Doubts Emerge over Latin America Economies After the Boom Years

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5 min read
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Is Latin America prepared for the choppy waters ahead?

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While Latin America came through the financial crisis relatively unscathed, complacency is a growing danger. Many of the region’s governments have not carried out the reforms necessary to sidestep a pending downturn. Economist Guillermo Perry argues that Latin American nations are failing to address the issues that threaten their continued economic growth. Although his article is somewhat light on detail as to the exact problems the diverse economies of the region face and the solutions they need, getAbstract recommends this short passage to businesspeople and investors with interests in Latin America. Forewarned is forearmed.

Summary

Latin American economies have been growing faster than Western economies since 2003, though that growth is decelerating. The average growth rate across the region was 3% in 2012, down from 4.5% in 2011. Though some commodity prices have declined, Latin America has benefited from good trading conditions, “high international liquidity and healthy domestic demand.” However, it is uncertain how long this trend of growth will last. If the US Federal Reserve pulls back on recent expansionary policies, high international liquidity is likely to end. Then commodity prices...

About the Author

Guillermo Perry is a nonresident fellow at the Center for Global Development. He is the former chief economist of the Latin America and Caribbean region at the World Bank.

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