China Key To Latin America, Caribbean Growth

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News Americas, WASHINGTON, D.C., Fri. Sept. 23, 2011: Chinese investments have been driving the growth in the past decade in Latin America and the Caribbean, a new report says.

The World Bank this week said the region’s relationship with the Asian giant has proven to be a critical source of stability, both during the global economic crisis of two years ago and the current market turmoil that is rolling across Europe and the United States.

So far growth forecasts for LAC have remained positive between 3.5 and 4.5 percent for 2011 and 2012 and inflation rates are expected to stat between 6 and 7 percent this year. And sovereign debt default risk of several countries in LAC, including Chile, Colombia, and Peru, is now lower than that of France.

“There is little evidence that China can play a role in fostering productivity growth for Latin America and the Caribbean,” according to the World Bank’s Chief Economist for the region, Augusto de la Torre. “In this new context of lackluster economic performance in the U.S. and Europe, one key question is whether LAC can leverage its deepening connections with China and turn it into an important source of long-term growth.”