Thursday, December 4, 2008

Lagged Effects of the International Credit Crunch on Latin America

. Thursday, December 4, 2008

The Latin American Shadow Financial Regulatory Committee (CLAAF), a group of economists from Latin America that includes former finance ministers and central bank governors, released a statement after meeting today in Washington, estimating that Latin American governments will need roughly $250 billion just to repay maturing debt and support budgets in 2009. 

The Financial Times reports:
The statement described a marked deterioration of the region’s economic prospects in the past few months caused by a flight to high quality assets and the freezing up of international credit. The region would suffer from a sharp slowdown in the world economy and falling export prices, it said.

Unless credit found its way to the region, the economists said governments would be forced to choose between two unappetising alternatives: painful fiscal adjustment that would reinforce the downturn or distortive measures, such as import restrictions and capital controls.

“In the absence of adequate international actions, beggar-thy-neighbour policy responses may be politically inevitable, seriously undermining the basis of the global co-operative system that emerged in the aftermath of World War II [that] allowed for unprecedented rates of growth of trade and incomes and a reduction in global poverty.”
Although Latin America has not been directly affected as a result of the liquidity and credit crises that have affected the American and global economies over the past year, as detailed previously on this blog, the future may see indirect effects as Latin American nations may be "crowded out" of international credit markets as Western nations expand their borrowing and run large fiscal deficits. 


Adele said...

Experts and patriots are enraged:

The crazies secretly maneuvered more wealth into their pockets

In the last year, than they did in the last 185 years!

Meaning the top 1% now own as much wealth as half the world

Just 5 years ago the filthy rich were 388.

As of January 2016 there’s only 62 people who own

HALF the world!

>>Watch shocking video<<

No living soul can spend that much money in a lifetime…

And when people sits on money,

The economy stalls.

And that’s how it all begins:

What’s coming in the next 6 months or less

Will give a new definition to the infamous “economic crisis”

>>Access U.S. Dollar Exposed!<<

Are you prepared to be broke…




Or can you turn the game around:

>>Profit from the dollar crisis: watch video<<

[Mr Mark Fidelman]

Lagged Effects of the International Credit Crunch on Latin America




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