Latin American countries have become less vulnerable than in the past to global slowdowns after strengthening public finances, reducing debt and building reserves, an IMF official said on Saturday. "The region as a whole has improved ... reduced considerably its vulnerabilities," International Monetary Fund deputy managing director Murilo Portugal told Reuters.
"There is a greater resilience now to face external deceleration." He said many Latin American countries have improved their public finances by reducing debt and substantially increasing international reserves.
A string of weaker-than-expected economic data from the United States has raised concern the economy there may be slowing faster than expected, and that a subprime mortgage crisis could spread to other parts of the economy.
Draft International Monetary Fund forecasts obtained by Reuters earlier this week showed the international body expected global growth of 4.9 percent this year and next after last year's brisk 5.3 percent.
Economists attribute recent improvements in financial stability in Latin America partly to moves by some countries to replace debt in dollars and euros with debt in their local currencies, reducing risk from foreign exchange swings.
A study presented on Saturday by Inter-American Development Bank Senior Economist Andrew Powell at the regional lender's annual meeting in Guatemala showed issuance of domestic debt in Latin America had steadily increased since the 1990s, especially in small countries with limited access to markets.
Powell said countries should take advantage of a relatively positive financial environment in Latin America to continue the process and thus further protect their economies against external turbulence.
"Countries ought to be using these good times to change the structure of the debt to share risks more effectively," he said.
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