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RPT-IADB lowers Latam 2013 growth to 3.5-4 pct, cites global risks
January 28, 2013 / 11:41 AM / 5 years ago

RPT-IADB lowers Latam 2013 growth to 3.5-4 pct, cites global risks

* Stimulus measures in developed world a risk -IADB

* International economy main risk for booming Latam

By Alexandra Ulmer

SANTIAGO, Jan 26 (Reuters) - Latin America’s economy should grow less than forecast this year, as the export-dependent region faces threats from stimulus measures in the developed world and an unresolved debt crisis in Europe, the Inter-American Development Bank said on Saturday.

The IADB now sees the export-dependent region expanding between 3.5 percent and 4 percent in 2013, down from an August forecast for 4.2 percent growth though still higher than last year’s estimated expansion.

“One of the problems is this cloud of uncertainty over the global economy,” IADB president Luis Alberto Moreno said when asked by Reuters on the sidelines of the summit of Latin American and European business leaders in Santiago, the Chilean capital.

The United Nations last month also lowered its growth outlook for Latin America and the Caribbean, saying the region will likely grow by 3.8 percent in 2013, less than previously forecast, as slower growth in Mexico weighs against a recovery in Brazil, Argentina and the region’s brisk domestic demand.

Either way, the region’s growth is seen picking up pace from the UN’s downward-revised 3.1 percent expansion view for 2012, which largely defied fallout as a result of softer demand from key trade partner China and lingering euro zone debt woes.

Moreno also echoed several Latin American leaders concerns that stimulus measures in the developed world will trigger more capital flows that could further strengthen the commodities-dependent region’s currencies.

“These issues by central banks.... become a problem for emerging countries for various reasons,” Moreno said. “Chiefly because they generate the potential that financial bubbles arise.”

Moreno said the bank would lend around $12 billion to the region this year, up slightly from 2012 levels.

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