IMF warns Latam economic boom ‘could end in tears’ if spending is not trimmed

Friday, May 13th 2011 - 05:18 UTC

Full article 6 comments

Latin America's economic boom could end in a “full-blown” crisis unless the region's governments properly manage the situation, the International Monetary Fund's top regional official said in an unusually stark warning to both policymakers and investors. Read full article

Comments

Disclaimer & comment rules

GeoffWard
Dilma should slim down massively the size of the federal (and states') administrative apparatus which relies on 'many hands' rather than 'much technology' and on arcane 'make-work' methodologies.

This would help the immediate threat and would certainly help the Pensions Hole - which is HUGE.

Employees will rapidly redeploy into the private sector to the better advantage of the nation.
May 13th, 2011 - 11:38 am - Link - Report abuse 0
-+
xbarilox
“Employees will rapidly redeploy into the private sector to the better advantage of the nation.” True, now go tell Cristina about the private sector lol, she's just as looney as her husband, she believes that Argentina's having progress because of her “Modelo”, perhaps she will finally accept the real numbers of intlation and stop thinking about the re-election to concentrate in real problems, and stop printing money like crazy. These times will put “El Modelo” to the test.
May 13th, 2011 - 03:23 pm - Link - Report abuse 0
-+
Forgetit87
@GW

In BR, government consumption in 2010 grew by about 3% - much less than total GDP growth. In 2011 - if one is to trust numbers produced by the private agency Serasa - government spending grew, again, around an annualized 3% -- much less than investment and private consumption. Therefore, there isn't much room for the government to reduce spending levels, which are already modest.

As Mark Weisbrot said once, the IMF behaves as a creditor's lobby group. And it is in the interest of the creditors that inflation remains low, and even if the government itself can do little about it - after all, most inflation in BR is imported from abroad.
_____
As for this article, I'm not even going to read it. Most public statements by IMF officials tend to be biased and trivial.
May 13th, 2011 - 04:20 pm - Link - Report abuse 0
-+
Forgetit86
“Much of the region's strong economic growth and the run-up in its currencies have been fuelled by rises in global commodity prices”

Lie.
http://www.financeasia.com/News/239307,the-growing-importance-of-china-brazil-trade.aspx
May 13th, 2011 - 04:29 pm - Link - Report abuse 0
-+
Fido Dido
most inflation in BR is imported from abroad.

Correct, again and again why the Federal Reserve is the creature of jekyll island (Great book by the way) with keeping interest to 0% and QE1,QE2 and Q3 with what Mr Bernanke already flirts with...
http://www.zerohedge.com/article/why-qe-3-guaranteed-alternative-something-four-times-bigger-2008

Again..Destroying the dollar and make the banksters rich and richer (all the Qe's) = rising globlal commodity prices that are priced in dollars. IMF=Stronghold of the Federal Reserve is the manipulator and nothing more than Bankrupt. (That's why they enjoy spining lies into the truth and attack Ireland, Portugal, Greece etc etc)

Forget, your link doesn't work. to bad.
May 13th, 2011 - 06:36 pm - Link - Report abuse 0
-+
GeoffWard
Nice to see you engaging again, Forgetit.
I knew you just couldn't stay away!
;-)

Have a look at the UK pensions picture

and then compare the demographies (actuarial life-tables) of the UK and Br.

For Br:
estimate % of wage/salary paid as pensions for each government sector/level,
multiply by the numbers involved and
extend over the full life-table for all groups.
[OK, I know you would need actuarial years to do it accurately!]

The figures are staggering - and supported by taxes.

What proportion of the Br population pays taxes?
What is the cumulative tax paid by the average Br taxpayer?

and how much will these people's taxes have to rise for them to pay these staggering *cumulative* year-on-year-increases in total state pension payments?

Of course, you could use the British argument - pay future pensions out of Growth and snaring more (Brasilians) into being taxpayers.

Smiles wryly.
May 13th, 2011 - 07:47 pm - Link - Report abuse 0
-+

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!