The report requested by Mexico was made public during the recent Rio Group summit in Playa del Carmen, assesses challenges and opportunities for Latin America in the current global climate, underlining the response of some of the region’s countries to the international slowdown, considered the worst in seven decades, but the situation is also positive “since the worst of the international crisis is behind.”
IDB president Luis Alberto Moreno said that 2009 overall was “positive” for Latin America and the Caribbean in a year when all the economies suffered the “full impact of the global recession” closing an expansion cycle which prevailed since 2003.
Nevertheless in Latin America and the Caribbean contrary to what happened previously the response was strongly “anti-cyclical” and above all “very effective.” As a consequence Latin American is going through an inflexion moment and even when the worst of the crisis is behind it still has “a significant number of structural challenges” ahead.
Looking into 2010 the report anticipates that Latin America is set to recover an “encouraging” growth rate level, although “it will depend on the circumstance of each country.”
Moreno said it will also be the moment to abandon “expansionist fiscal and monetary policies,” adding that almost all countries of the region “face serious fiscal challenges in the long term” and a greater competition among emerging economies can be expected as “we move out of the recession.”
In effect the fiscal situation of some Latin American countries “remains frail” particularly because of its dependency on the export of commodities.
However the report also points out to the fact that in recent years Latin America and the Caribbean has achieved “impressive” figures of poverty reduction and the region is en route to combat “structural poverty.”
Latin America and the Caribbean region GDP contracted 1.8% in 2009 according to the UN Economic Commission for Latin America and the Caribbean, Cepal, or 2.6% for the IMF.