United Nations Conference on Trade and Development (UNCTAD) said that while Argentina was facing potential financial instability, its solvency and the sound macroeconomic fundamentals in other countries of the region “should prevent the shock from developing into a regional financial crisis.”
The UN office criticized the legal obstacles Argentina has faced in servicing its restructured debt obligations.
The document that examines the global economy said that while the region is safe from financial contagion, economic growth in recent years has become lackluster.
“Latin America and the Caribbean has slowed down to an estimate two percent (GDP growth) in 2014,” according to the report.
This reflects the slow growth in the region’s three largest economies — Argentina, Brazil and Mexico — where domestic demand, which is their main driver of growth, has lost momentum.
UN experts said that global financial shocks between 2013 and 2014 had been a major factor in this decrease, causing macroeconomic policy to tighten.
However, the report also noted that the highly-liquid banking systems, small external and fiscal deficits and a sufficient amount of foreign reserves had permitted the region’s countries to have enough of a buffer to prevent economic woes from spreading into a regional issue.
From the beginning of 2000, developing countries witnessed an increase in export concentration, meaning less diversification of exports and production, the UN warned.
Argentina, along with China and Mexico, showed a minor increase in comparison, but their export revenues were still dependent on a small set of products.
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More denial. rotting roadkill has already hurt the region. Brazil is already impacted.Sep 12th, 2014 - 07:44 am 0
When Argentina starting sinking they latched onto Brazil with all their weakness. Brazil had one opportunity to do something to save themselves but Dilma decided to risk many to save few and now she will pay the price for Brazil and herself in October.Sep 12th, 2014 - 09:35 am 0
Brazil is very well. Our foreign exchange reserves cover five years of the current account deficit.Sep 12th, 2014 - 10:59 am 0
If there was not a single Yuan in foreign direct investment in the country, we'd liquidity for 5 years. Also coming is a mountain of money from pre-salt, somewhere around 125 billion reais annually already in 2015. 65 billion that we will cease to import, 60 bilhões that will export.
However, if some day we need economic-financial aid, China is willing to help us. We created the Bank of BRICS and funds of foreign exchange reserves.
Do you know that?