Dani Rodrik recently wrote in his daily blog that Andrés Velasco is the living example that sound macroeconomic policies have a high dividend. Chile’s decisive fiscal stimulus package –adopted last January– has made him President Bachelet’s most popular minister. Not too long ago, during the years of high copper prices, many Chileans questioned their government’s […]
Last November, the International Monetary Fund revised its economic outlook for 2009. In the case of the six largest economies of Latin America, the growth projection was lowered from 4 to 3 percent. Two months later, this projection seems overly optimistic. In fact, data released in the first weeks of the year suggest a much sharper than expected deceleration in industrial production during the last months of 2008. The same is true for consumer confidence. Indeed, relative to a year before, industrial output fell by 15.1 percent in Argentina, 6.2 percent in Brazil, 5.7 percent in Chile (all figures for November), and 2.7 percent in Mexico (in October). The decline in consumer confidence has been particularly fast. A 15 to 20 percent reduction in consumers’ perceptions (since mid-2008) is the norm in these countries.
After the G20 finance ministers and the World Bank/IMF annual meetings in Washington last weekend, most Latin American ministers of finance returned to their countries with a somber outlook. As the global financial crisis continues to unfold, it was clear that developing countries may have to replace some market financing with lending from the multilaterals, and prepare for the recession in the U.S., which will inevitably occur as a result of the credit squeeze of the past months, and its impact on global markets.
Editor’s Note: As the financial crisis has widened, some analysts have asked the U.S. government to consider debt relief for American families who are struggling with mortgages they can no longer afford. Mauricio Cardenas explains how a previous crisis in Colombia offers lessons for the U.S. and argues that U.S. government debt relief is a […]
A total of 32 governors and more than a thousand mayors were elected yesterday in Colombia. The opposition is claiming victory, in part because candidates from the leftist party Polo Democrático Alternativo (PDA) and from the Liberal Party won in some key cities, like Bogotá (the capital), and in some large departments, such as Atlántico, […]