Continued government reforms will keep Latin America on a projected upward growth trend of 3% in 2001 and 3.7% in 2002 despite a slowdown in the global economy, according to Elizabeth McQuerry, a Latin America research coordinator for the Federal Reserve Bank of Atlanta (FRB-Atlanta.)
Citing the drop in real GDP growth in the U.S. (down 3.3%), Ms. McQuerry suggested that countries with the deepest economic ties to the U.S. would be hardest hit, while countries with low export percentages to the U.S. would fare better. She presented the research at the Atlanta Summit of the Americas at Goizueta Business School at Emory University last week.
Argentina (with 11% of total exports going to the U.S.), Brazil (23%), Columbia (48%), Peru (29%) and Venezuela (50%), she maintained, would not be overly affected by the U.S. slowdown in particular.
Mexico however, which sends 83% of its total exports to the U.S., will be vulnerable she cautioned, but should be able to counterbalance the negatives with fiscal reform and a maturing economy. Argentina’s current political upheaval, she added, is not likely to spill over on a large scale in the region, though Brazil, Argentina’s largest trading partner, may experience some fall-out.
Ms. McQuerry also noted that Latin America’s oil exporting nations would profit from continually strengthening oil prices, and many countries are expected to benefit from lower interest rates, generated by the economic slowdown, on their foreign debt.
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