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Montevideo, March 28th 2024 - 15:30 UTC

 

 

IMF warns Latinamerica is lagging investment

Thursday, December 14th 2006 - 20:00 UTC
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IMF Director for the Western Hemisphere  Mr Anoop Singh IMF Director for the Western Hemisphere Mr Anoop Singh

The International Monetary Fund, IMF said that higher levels of investment in Latinamerica can only be reached if several obstacles are tackled: a significant cut in current debt level; lower government expenditure; expansion of the taxable base and greater credibility for monetary institutions.

During a two hours meeting this Thursday in Argentina's Central Bank in Buenos Aires IMF Director for the Western Hemisphere Anoop Singh addressed the issue of "Global context and the regional prospects for Latinamerica".

In his 33 page presentation Anoop Singh said the region is growing vigorously on the back of a most favorable international context particularly the high prices for commodities, but he also pointed out there's a productivity problem that can only be addressed with increased investments.

And the requirements for increased investment need to tackle a major reduction in government debt; contain and better define government expenditure objectives; less rigid national budgets; expansion of tax collection; reforms to the financial system and greater credibility for monetary policy institutions and finally monitoring the expansion of credit. Argentina's Central Bank president Martin Redrado said that the Argentine monetary program is on track with the M2 factor growing at a lesser rate than the economy, adding that inflation targets should not be tampered with until overall credit does not reach 22% of GDP. Singh emphasized that the major strength of the region currently is taking advantage of the bull market for agriculture commodities and minerals, but admitted is growing at a higher rate than the rest of the continent. However Redrado pointed out that the value of some grains currently are still 2'% below their peaks of the nineties. Singh also cautioned that the IMF believes that the deceleration of the US economy will be more abrupt than anticipated.

Categories: Economy, Mercosur.

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