Global Economic Environment Major Challenge To Latin America

News Americas, WASHINGTON, D.C., Fri. Oct. 6, 2011: The shift in the global economic environment poses major challenges to policymakers in Latin America and the Caribbean the IMF said this week.

According to a Regional Economic Outlook report from the body, while Latin America and the Caribbean is expected to expand by 4.5 percent in 2011 and to moderate to about 4 percent in 2012, fears of a global slowdown are starting to weigh in on the region’s financial markets, with equities, currencies, and commodities taking a hit.

Especially since Latin America is dependent on commodities and with commodity prices quite sensitive to global output, the region is particularly vulnerable to a global economic slowdown.

The IMF warned that Latin America and the Caribbean should generally stay their present policy course, including maintaining a nimble monetary stance and rebuilding fiscal buffers – but stand ready to shift course should the risks noted above materialize.