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IMF sees commodity price drop in Latin America. Growth expected to decline and a warning to Central America if US slows down

Tuesday, September 20, 2011

Surging commodity prices gave a huge boost to Latin American economic growth last year, but slowing demand for those commodities and tighter macroeconomic policies within the region are now causing growth rates to retreat, according to a new report from the International Monetary Fund.

Latin America grew a healthy 6.1 percent in 2010, but likely will fall to a 4.5 percent growth rate in 2011 and slow again to 4 percent growth in 2012, according to the IMF's World Economic Outlook, of which only the first two chapters were released.

However, the IMF notes that the risk to the forecasts for a modest drop in growth is to the downside. "A sharper slowdown in advanced economies, notably the United States, would dampen growth, particularly in economies dependent on trade, tourism spending, and remittances (the Caribbean, Central America, Mexico)."

Original source: Dow Jones