IMF official says U.S. Fed mindful of global impact
BOGOTA (Reuters) - Latin America's growth outlook is shaky and a delay in pulling back economic stimulus in the United States shows the Federal Reserve is mindful of the impact its actions can have on other countries, an International Monetary Fund official said on Wednesday.
Investors and policymakers in Latin America and other emerging markets were relieved when the U.S. Federal Reserve decided against scaling back its bond-buying program last week, for now at least.
Many fear that less-accommodative policy in the world's biggest economy will draw back capital which has flowed into developing economies in recent years, hurting markets and currencies and even economic performance.
"It's important to analyze the effects on the global economy, on global markets," Alejandro Werner, head of the IMF's Western Hemisphere department, said of the Fed's decision, adding that U.S. domestic conditions were the most important factor in the decision.
Latin America registered a "very significant" slowdown in economic expansion in the first half of the year, he said on the sidelines of a conference in Bogota, suggesting that 2013 growth might come in lower than expected.
He declined to provide specific forecasts for growth ahead of the IMF's annual meeting in October, when it will update economic projections, but said the region needed to boost productivity.
The IMF cut its growth forecasts for Latin America in July to 3 percent from 3.4 percent, blaming weaker global growth and lower commodity prices that have hit exporters like Brazil.
"In the annual meeting we will provide specific numbers but the tendency is that the growth revision is downward," Werner told reporters.
"We have seen a very significant slowdown in the first half of the year." Continued...