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Video: Global Risks and Political Uncertainty — The Impact on Latin America's Growth Prospects

Wednesday, September 18, 2019

Panelists:

  • Clay Lowery, Executive Vice President, Institute of International Finance 
  • Eric Parrado Herrera, Chief Economist and General Manager of the Research Department, Inter-American Development Bank 
  • Atsi Sheth, Managing Director in Credit Strategy and Research team and Chief Credit Officer for the Americas, Moody’s 
  • Krishna Srinivasan, Deputy Director, Western Hemisphere Department, International Monetary Fund 

Latin America's economic growth has been sluggish due to decades of delay on structural reforms and inadequate monetary policies, but today's global economic risks make the outlook for the region gloomier. Per the IDB's projections, for a region where growth averaged 5.6 percent in 2007, the rate fell to 1 percent in 2018 and could be around 0.5 or 0.6 percent in 2019, said Eric Parrado Herrera at a COA event in DC. External risks such as Brexit could also have an impact at a time when there's a need for new sources of growth. Countries' large fiscal deficits and increasing dollarization makes them less resilient to another global crisis. U.S.-China tensions can affect the region if the trade giants' economic growth declines by more than 1 percent. "Those factors together can result in significant impact in Latin America," said IMF's Krishna Srinivasan.

But boosting growth in the region is not just about macroeconomic policies and global risks: governance, technology and innovation opportunities, human capital, and the skills gap are all factors that have a crucial role in bringing future prosperity to the region, said Moody's Atsi Sheth. Increased regional integration, the creation of strong financial institutions, and the fight against corruption are all positivie signs, said Clay Lowery from the Institute of International Finance.

Learn more about this September 18 program