MercoPress. South Atlantic News Agency

German bank optimistic forecast.

One of Germany's leading banks, Dresdner expects a doubling of capital inflow to Latinamerica in 2003, which should significantly help the foreign accounts of the region's countries.

In its July report on economic prospects for Latinamerica, Dresdner Bank estimates the inflow will reach 51 billion US dollars in 2003, compared to the 26,5 billion US dollars of 2002.

"Improved economic prospects, a more stable political climate, lower interest rates out of the region and an easing of fear regarding world investments", are some of the reasons for the greater inflow that will be directed mainly in the bonds markets.

However the bank warns about over optimism recalling that those figures are still "well below the 80 billion US dollars inflow of 2001". Dresdner estimates Latinamerica will average a 1,1% expansion this year.

Regarding countries, Argentina figures among the top of the list since the economy is expected to grow between 4 and 5%, and president Kirchner in eight weeks has managed to stabilize the ruling party and has attracted strong public opinion support, although "not much is known about mid term policies and goals". Dredsner Bank estimates an annual 7% inflation with a gradual recovery of domestic demand.

Prospects for Brazil however are not encouraging: "high interest rates and difficult credit conditions" will have the economy growing 1,4% instead of the originally estimated 2%.

But a stronger Brazilian currency and the overall weakness of the economy will help inflation to drop from 11,5% to 9,5%.