default header
03/19/2003
Moderate Economic Recovery Underway in Latin America, Report Says
Excluding Venezuela, IIF projects 2.4-percent growth in region for 2003
A moderate economic recovery is underway in Latin America, according to a March 19 report released by the Institute for International Finance (IIF), a global organization of financial institutions.
The report indicates that, with the exception of Venezuela, there are signs of stronger growth throughout the region. The IIF projects that, excluding Venezuela, regional GDP growth will grow 2.4 percent in 2003.
Following is the text of the IIF press release accompanying the March 19 report:
(begin text)
INSTITUTE FOR INTERNATIONAL FINANCE
Washington, D.C.
FOR IMMEDIATE RELEASE
March 19, 2003
Improvements Seen in Economic Outlook for Latin America
IIF Releases Forecasts Ahead of the Annual Meeting of the Inter-American Development Bank
Washington, March 19, 2003 -- The Institute of International Finance (IIF) today released its regional economic forecasts for Latin America showing a moderate recovery across most of the region following slight GDP declines in 2001 and 2002. The IIF report is being issued on the eve of the 2003 annual meeting of the Inter-American Development Bank, which will be held in Milan.
The IIF, the global organization of leading financial institutions stated in today's report that policies are improving in a number of countries and there are signs of stronger growth throughout the region, with the exception of Venezuela. Economic activity has already started to pick up in most countries and the IIF expects this to gather momentum in the second half as global conditions improve and investor confidence strengthens. Excluding Venezuela, the IIF's projects real GDP growth in the region to increase 2.4 percent this year and 3.2 percent in 2004.
The IIF report noted that there are significant downside risks to the recovery forecast. In many countries, investor and consumer confidence is fragile and in some, it has yet to be established. Governments may succumb to populist political pressure and fail to implement policy to the extent needed to sustain the recovery. Prolonged conflict in the Middle East, sustained higher oil prices, lower growth of the global economy, heightened risk aversion, and renewed pressure on exchange rates and prices, could force the authorities to tighten fiscal and monetary policies further, and slow the recovery. The outcome in all countries will depend ultimately on the ability of political leadership to maintain a national consensus and broad political support for policy discipline. Thus far, the balance of evidence is encouraging.
(end text)
(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
