MercoPress. South Atlantic News Agency

Reasonable prospects for Latinamerica.

World economic growth will abruptly slowdown this year falling to 2,2% from last year's 4%, according to the latest World Bank report. However this hard landing should be softer for Latinamerica GDP which is expected to grow 3,7% in 2001, almost equivalent to last year's 3,8%, and push to 4,4% in 2002.

The report indicates that the successive cuts in US interest rates have been vital in keeping Latinamerica rolling at a reasonable pace. The in flow of capital into the region is forecasted to jump an additional 20 billion US dollars, from last year's 95 billion, and remain steady in the following years, 2002 and 2003.

"Improved investment climate in Mexico and Brazil, plus a more strict macroeconomic monitoring will keep capital flowing into the area", according to the World Bank.

As far as Mercosur is concerned the report anticipates a "revitalization" of trade activities once growth among member countries begins to level. Latinamerica continues as the main attraction for foreign direct investments in emerging markets as certain crucial ratios keep improving: foreign debt/GDP has dropped from 42% in '99 to 38% in 2000; foreign debt/total exports also diminished from 208% to 173%.

The report also in optimistic about the future at world level, in spite of the current drop. World Bank expects the world economy to grow 3,3% in 2002 and 3,2% in 2003.

Although latest indicators in the main economies, United States, European Union and Japan are not very encouraging World Bank estimates that a quick recovery is more likely than a prolonged slow growth situation.