by Luis Alberto Moreno

Latin America is a key player in globalization. The benefits of trade flows and investment are clear. In 2004, for example, 50 percent of China's foreign direct investment went to Latin America.

Latin America has shown itself to be sound financially, maintaining its position while being little affected by recent financial events. Although the epicenter of the current crisis has been mortgage-backed securities in the United States, the region's securities markets have come out of the situation relatively well.

Growth in the United States has slowed, and future prospects have been diminished. However, the outlook for Latin America remains solid:

Estimated growth for the region's economies in 2007 is 5.3 percent-the fifth consecutive year it has topped 4 percent. Exports will grow around 21 percent, the fourth year of growth. Central government deficits are averaging just 0.3 percent of GDP so far this year, while their balances of payments have hit historic highs. International reserves have increased to truly massive levels, more than three times the amount of short-term debt, which is enough to cover nearly seven months of imports. Average inflation in the region is estimated at 5.3 percent, where it has been for more than a decade. Economic growth for 2008 is projected at around 5 percent, triple the rate of population growth.

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Posted by dcjaya at December 29, 2007 1:17 AM