-Contributed by Alison Bowen
Latin America’s economy could begin to decline in 2007, according to an article in the Miami Herald.
According to reports from the International Monetary Fund, the Latin American and Caribbean economies will grow by 4.9 percent this year, compared to 5.5 percent last year. The decline continues into 2008 with 4.2 percent growth.
The dismal forecast follows the region’s best financial three-year period since the 1970s, according to the IMF.
Growth in some countries, including Venezuela and Argentina, may continue, but at a less impressive pace. Economic progress in Chile and Brazil will actually increase.
Partially blamed for the slowed economy is the United State’s economic slowdown, which affects the world economy. Prices of oils and metals, an integral part of Latin American economies, also are expected to drop.
In the article, Andres Oppenheimer argues the drooping economy might be a good thing.
Links: The Miami Herald
Image: Planet Curioso
LOL. The IMF's economic predictions in Latin America have been so ridiculously biased (and WRONG) in the past few years, I don't see how anyone should be taking what they say seriously.
ReplyDeleteHere is an excerpt from a column by Mark Weisbrot (link to full article below):
"It is interesting to look at the IMF’s projections for the Argentine economy during this time, which are made at least twice a year in its World Economic Outlook. For 2003, the Fund forecast growth of 1.0 percent, but the economy grew 8.8 percent – an error of 7.8 percentage points. For the years 2004, 2005, and 2006, the Fund's projections produced underestimates by 5.0, 5.3, and 4.3 percentage points, respectively. These are enormous errors, and they all go in the same direction – at a time when the Fund had an antagonistic relationship with the government of Argentina.
These could just be mistakes – but then look at the IMF's projections for the years 2000, 2001, and 2002, when the IMF was loaning the Argentine government billions of dollars to support policies that ultimately ended in an economic collapse. In these years their projections were way off in the other direction, over-estimating growth by 2.3, 8.1, and 13.5 percentage points. (These projections are all made in September of the previous year)."
The Decline of the IMF