Arab Today, arab today global economic slowdown continues to weaken latam economies
Last Updated : GMT 17:40:59
Arab Today, arab today
Arab Today, arab today

Global economic slowdown continues to weaken LatAm economies

Arab Today, arab today

Arab Today, arab today Global economic slowdown continues to weaken LatAm economies

Global economic slowdown continues
Mexico City - XINHUA

Global economic slowdown and weak economic recovery in the United States continue to threaten Latin American countries, raising the risks of capital flight and currency devaluation.

According to the Economic Survey of Latin America and the Caribbean 2015 published recently by the Economic Commission for Latin America and the Caribbean (ECLAC), the region's currencies have tended to weaken against the U.S. dollar over the last year.

The ECLAC attributed this depression to the withdrawal or slowing down of stimulus programs, the fall in prices of basic goods, the lower availability of capital in international markets, and the overall regional economic slowdown.

"We cannot see the light at the end of the tunnel," Alicia Giron, a researcher at the Institute of Economic Investigations of the National Autonomous University of Mexico, told Xinhua.

"The International Monetary Fund (IMF) is constantly lowering its growth rate predictions. This is a complex crisis that is making all regional currencies more volatile," Giron said.

In its annual study, the ECLAC said that "lower interest rates, as a result of relaxing monetary policies, contributed to the fact that, in 2014, the currencies of 15 countries depreciated against the U.S. dollar."

Furthermore, the announced rise in interest rates in the U.S. is making many countries nervous as they fear it may lead to a capital flight which may cause an abrupt devaluation of their currencies.

"Many strong pressures are coming into play, currently exemplified by the fall in oil prices and the strengthening of the dollar," said Sergio Garduno, a senior consultant at Consultores Internacionales, a Mexican economic consultancy and prospective analysis firm.

"However, the change in U.S. interest rates will have a much more direct impact," Garduno said.

In July, Chairwoman of the U.S. Federal Reserve Janet Yellen said that she hoped to implement an interest rate hike in 2015 but did not provide specifics.

As Mexico is among the countries that might be most affected by a potential capital flight, the government has responded with a fiscal policy set to protect liquidity and avoid chaos in the foreign exchange market.

The country can also count on ample foreign reserves and a flexible line of credit that could help dampen the impact of a capital flight.

In early 2015, the Mexican peso saw an annual devaluation of 20 percent against the U.S. dollar, largely due to an expected interest rate hike in the United States.

This was just part of a larger impact that external economic factors have had on Latin American countries, which have struggled to see their gross domestic growth rise above 3 percent annually in recent years, according to Garduno and Giron.

This year, the situation will be even worse.

According to the ECLAC's latest projection, Latin America and the Caribbean countries' economy will only grow by an average of 0.5 percent in 2015, with South America's economy to contract by 0.4 percent, Central America and Mexico to grow by 2.8 percent and the Caribbean to grow by 1.7 percent.

For Giron, this stagnation will cause a very real slowdown in job creation. "If the economy is not growing, neither is the formal labor market," she warned.

The informal labor market will become an "escape valve...but will provide low-quality jobs, which are poorly paid and have no access to social security."

As a result, "this crisis will definitely lead to poverty increasing in Latin American countries," concluded Garduno.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today global economic slowdown continues to weaken latam economies Arab Today, arab today global economic slowdown continues to weaken latam economies

 



Arab Today, arab today
Arab Today, arab today Jordan airline suggests flyers 'talk'

GMT 11:59 2017 Friday ,24 March

Jordan airline suggests flyers 'talk'
Arab Today, arab today 5 Crafty Must-Have Limited-Budget Ideas

GMT 17:03 2017 Saturday ,25 March

5 Crafty Must-Have Limited-Budget Ideas
Arab Today, arab today Dozens dead in US-led Syria strikes

GMT 08:35 2017 Thursday ,23 March

Dozens dead in US-led Syria strikes
View News in Arabic - Business: اقتصاد دولي
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Yemen children dream of school

GMT 07:25 2017 Friday ,24 March

Yemen children dream of school
Arab Today, arab today MP submits a petition to dismiss university head

GMT 06:21 2017 Friday ,24 March

MP submits a petition to dismiss university head
Arab Today, arab today Salvage of South Korea's Sewol ferry

GMT 04:51 2017 Friday ,24 March

Salvage of South Korea's Sewol ferry
Arab Today, arab today Prepares to give stargazers an eyeful

GMT 13:38 2017 Monday ,06 March

Prepares to give stargazers an eyeful
Arab Today, arab today Audi RS 5 Coupe acquires new design

GMT 13:22 2017 Thursday ,23 March

Audi RS 5 Coupe acquires new design
Arab Today, arab today Renault Trezor wins design award

GMT 11:56 2017 Tuesday ,21 March

Renault Trezor wins design award
Arab Today, arab today Actress Mervat Amin reveals her role in new series
Arab Today, arab today 2017 already marked

GMT 15:25 2017 Tuesday ,21 March

2017 already marked

GMT 06:04 2017 Thursday ,23 March

Haifa Wahby bets on her new drama show

GMT 22:00 2017 Thursday ,23 March

Number of unwedded girls amounts to 2.5m

GMT 18:57 2017 Tuesday ,21 March

Accessories designer reveals her new collection

GMT 10:34 2017 Tuesday ,21 March

Mexico threatens to ditch US corn imports

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures

GMT 20:03 2017 Saturday ,25 March

Health expert warns from dust sensitivity

GMT 07:36 2017 Wednesday ,22 March

US, Britain ban laptops on flights

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons

GMT 19:27 2017 Saturday ,11 March

Boualsof launches "Priestess Kahina" collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday