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Latin America Economic Prospects in 2013

1/3/13
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In this CNN interview, Senior Fellow Liliana Rojas-Suarez explains that while the region’s economic growth prospects remain strong for 2013, there are some factors that will limit its growth potential. First, external financing needs in the region, as measured by the current account of the balance of payments are widening. This, together with the presence of fiscal deficits in most countries (with the notable exception of Chile and Peru) reduce the region’s resilience to potential external shocks (such as an exacerbation of the Eurozone crisis). Second, institutional weaknesses and political constraints will hurt some countries in the region, notably Argentina and Venezuela. However, Liliana expects that political constraints to undertake much needed infrastructure investments in Brazil will be eased in 2013, partly motivated by the 2014 World Cup.

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