UPDATE 2-IADB cuts 2009 Latam growth outlook to 2.5 pct
(Adds detail on China contributions, byline)
By Adriana Barrera
SAN SALVADOR, Oct 30 (Reuters) - The Inter-American Development Bank has cut its forecast of economic growth in Latin America next year to 2.5 percent from 3 percent previously, the bank's chief said on Thursday.
Latin America's economies are much better cushioned against economic shocks than they were in the past, but a reliance on oil, commodities, U.S. demand, and migrant remittances means a feared global slowdown will hammer the region.
"We're thinking in the area of 2.5 (percent) for next year," IADB head Luis Alberto Moreno told Reuters during the Ibero-American summit in El Salvador, which was dominated by the global financial crisis.
Moreno had said on Oct. 17 that growth would slow to 3 percent in 2009 compared with 2008 growth of 4.4 percent to 4.5 percent.
Investors have sold off stocks and currencies in Latin America, plus other emerging markets, in recent weeks out of concern that a global recession and a drop in demand for commodities will punish their economies.
Moreno said the IADB was starting talks with China -- which became a member of the bank as a donor country earlier this month with a contribution of $350 million -- about the possibility of it also providing project financing in the private sector.
"Today the country with the most reserves is China and I think they are a part of the solution to resolve these liquidity problems," he said. "I think we can study with them ways to obtain additional resources."
China has become Latin America and the Caribbean's No. 2 trading partner after the United States. Its trade with the region has jumped 13-fold since 1995 to $110 billion in 2007.
Its initial donation to the IADB will be divided among various funds that lend to economic and development projects in Latin America and Caribbean countries.
(Editing by Neil Fullick) (catherine.bremer@thomsonreuters.com; Reuters Messaging: catherine.bremer.reuters.com@reuters.net))
