Inter-American Development Bank, IDB, CEO Enrique Iglesias said in Miami that the area will end 2004 with a far higher economic performance than we expected at the beginning of the year mainly because of sustainable economic policies and China's appetite for commodities.
"All countries are growing, but the bigger ones are expanding even better and this had led to encouragingly surprising numbers, above the 3,5%/4% we predicted earlier in the year. Now we're talking of 5%", said Mr. Iglesias in direct reference to Mexico, Brazil and Argentina the region's leading economies.
Mr. Iglesias who was addressing a Caribbean basin and Central America forum underlined that besides the China factor, countries were managing correctly their economies, "nobody is juggling with fiscal issues, nobody is printing money and they are actively addressing reforms; probably that is the essence of the current growth" in Latin America.
At the beginning of 2004, IDB forecasted the region would grow 4% after five years of a dismal 1,3%.
Asked about the economy management of several countries in the area which are under left-wing oriented governments such as Brazil, Chile, Argentina and next March Uruguay, Mr. Iglesias was optimistic.
"Left wing countries don't necessarily have to wrongly manage macroeconomics, they are doing it correctly in Europe, why shouldn't this be case in Latin America?". Several political analysts have suggested that several of the region's main countries are spending heavily in social programs and fear this could lead to an undermining of fiscal prudence or debt recovery.