IDB Optimistic on Caribbean despite US recession fears

`Despite the recent instability in international financial markets and the projected slowdown in the U.S. economy, the outlook for Latin America and the Caribbean is brighter than it has been in decades,`

While the reports cite IDB President Luis Alberto Moreno as basing his optimism on the decreased dependence on foreign capital inflows, a more diversified export base, more solid institutions and around $450 billion in international reserves, it’d be wise to note many Caribbean nations still will need to tap capital markets that will be increasingly tepid in the circumstance of a US recession, that inflation in most of these nations still hasn’t gone anywhere, and US demand could slow for imports for nations like the Dominican Republic and other CAFTA nations with long-term adjustment to the US trade deficit.

(See coverage of regional meeting here: IDB President Remains Optimistic About Caribbean Despite U.S. Slowdown)

Speaking of inflation, as it worsens for the givers of remittances to the Caribbean region, it could mean less money being sent to those nations. Last year’s statistics may hint at a slowing trend that made 2007 show the lowest remittance growth rate in a decade (Cf. Growth of remittances to Latin America slowed in 2007).

The IDB President still pointed out the fiscal concerns the IDB has for the region which has seen a trend in certain countries of spending without equally significant and needed investments.


About this entry