Another Look at Latin American Economy

After five years of strong growth Latin American economies were severely impacted by the current credit crunch. However the region holds plenty of potential for the future growth. The following are some key points from a “Regional Overview: Latin America” report by Institute of International Finance (IIF).

  • “Most countries are better prepared to confront the global crisis having implemented structural reforms and enhanced the quality of their economic policies over the past decade.
  • Bank regulatory frameworks have been made more effective and in many countries banking systems have become much stronger.
  • There is increased recognition that stronger public finances will lower interest rates and enhance economic growth.
  • Most sovereign borrowers in the region that have been pursuing sound policies have manageable external debt servicing prospects for 2009; however,
    a number of corporate borrowers have large syndicated loans and bond maturities falling due and face significant rollover risk.
  • A few countries with substantial foreign exchange reserves, such as Brazil, are offering foreign exchange loans to domestic corporates to help them remain current in their external debt service payments.”

Select Country Stock Market Indices


Despite the selloffs as shown in the above chart, the markets of Latin America are easily ahead of other emerging markets. The graph below shows that the European emerging markets are performing worse than the Asian and Latin American emerging markets.

LatinAmerican Stocks Performance Comparison 


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