MercoPress. South Atlantic News Agency

World Bank forecasts robust growth in Latinoamerica

Latinamerica and the Caribbean are forecasted to grow between 4.9 and 5% this year according to the World Bank's chief economist for the region Augusto de la Torre.

The region is undergoing a very robust moment compared to recent history", which is the result of a consolidated fiscal policy, lower indebtedness and a better mix of currencies in current debt with less US dollars and more local currencies, said the former chairman of Ecuador's Central Bank. De la Torre admitted that recent turbulences in world financial markets, originated in the sub prime mortgage crisis in the US, have had a down grading of expectations in the region but have not been "dramatic". "There have been modest reviews, and for Latinamerica specifically very modest". However economist de la Torre warned about the consequences of slower growth in United States and its possible impact in Latinamerica. "In this scenario (slower US economy) repercussions could be greater than expected, particularly for those countries closely integrated with the US such as Mexico and Central America". But given the advances experienced by Latinamerican economies, impacts should be subdued. "The framework of monetary and exchange polices has notoriously improved in the region which now enjoys robust systems geared to keep control of inflation and with greater exchange rate flexibility, making countries better positioned to absorb external shocks", he emphasised. Economist de la Torre added that many countries in the region are going through an unparalleled external situation with "surplus in their foreign accounts". The convergence of all these factors had resulted in a "far more robust region". In related news de la Torre said the World Bank was prepared to share its global experience with the Bank of the South, a regional development bank to be launched next month and described as the "brainchild" of Venezuela's Hugo Chavez. The Bank of the South is made up of Venezuela, Bolivia, Ecuador, Uruguay, Argentina, Paraguay, and Brazil and last week Colombia announced an interest in joining. "We believe the vision of the ministers and political leaders who promote the Bank of the South are that the bank acts as a complementary financing architecture for the region", said de la Torre. "In this architecture a new actor complementing, is most welcome", he underlined. Other multilateral financial institutions of the region besides the World Bank include the Andean Promotion Corporation and the Inter American Development Bank. World Bank Vice president for Latinamerica Pamela Cox also said that "we are willing to provide them (Bank of the South) with any assistance they might want". Cox said that the World Bank extends 8 billion US dollars in loans annually to Latinamerica while the Bank of the South is considering a starting figure which is more modest, 3 billion US dollars, "but there's room for all of us because the region is short of financial resources". Cox also pointed out that the new bank would not compete with the World Bank since "we have a global experience, a team of analytical professionals and experts going back six decades and a structure of loans which is increasingly market oriented".