S\u00e3o Paulo \u2013 In an article published this Wednesday (4th) on the International Monetary Fund (IMF) blog, the organization\u2019s Western Hemisphere Department director, Nicol\u00e1s Eyzaguirre, stated that the region is not free from spillover of the crisis now taking place in wealthy countries, especially in Europe. He said the estimates for Latin America, which the Fund will issue on the 24th, will be no better than those published in October 2011. On that occasion, the IMF forecasted that the region\u2019s Gross Domestic Product (GDP) will grow by 4.3% this year.<\/p>\n
Eyzaguirre claimed that for as long as the European crisis remains under control, the \u201cmost likely\u201d scenario is for Latin American growth to remain positive, though at a lower rate than in 2010 and 2011. However, should the risk increase, the region will suffer the consequences. This is so, according to the IMF executive, because Eurozone banks keep 25% of their assets in Latin America. The banks, he said, are adopting more conservative measures and restricting access to credit. <\/p>\n
\u201cThough these banks have prudently funded their Latin American activities largely through local-currency deposits, reducing their vulnerability to a dollar funding squeeze, fewer external credit lines available to banks could trigger a credit crunch in Latin America,\u201d said Eyzaguirre. He stressed that in case Europe\u2019s problems spread to other countries, raw materials prices could drop, which would be \u201ctoxic\u201d to the growth and stability of Latin America. <\/p>\n
The economist said Latin Americans may address the crisis by maintaining their public finances in order, increasing scrutiny over financial systems and stepping up public spending to curb an eventual slowdown. The latter, however, should only take place if \u201crisks appear.\u201d However, Eyzaguirre said the macroeconomic situation of many countries in the region is solid.<\/p>\n
*Translated by Gabriel Pomerancblum<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"
The Fund\u2019s Western Hemisphere Department director claims European banks have many assets in the region and may need them should problems worsen in Europe.<\/p>\n","protected":false},"author":2316,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[91],"tags":[],"class_list":{"0":"post-40323","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-economy"},"wps_subtitle":"The Fund\u2019s Western Hemisphere Department director claims European banks have many assets in the region and may need them should problems worsen in Europe.","_links":{"self":[{"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/posts\/40323","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/users\/2316"}],"replies":[{"embeddable":true,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/comments?post=40323"}],"version-history":[{"count":0,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/posts\/40323\/revisions"}],"wp:attachment":[{"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/media?parent=40323"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/categories?post=40323"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/tags?post=40323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}