New York University Professor of Economics Nouriel Roubini joined the American Society for an exclusive interview regarding Latin America’s economic outlook. During the interview Roubini said the region’s annual rate of growth should be at 3.8% for 2010. In October Roubini upgraded the growth outlook for Latin America from 3% to 3.3%. In this interview he placed it at 3.8%.
American Society: What is behind this increasingly positive outlook for Latin America?
Roubini: “There are two things. One is that global economic and financial conditions are improving. There is a recovery of growth even if it’s going to be anemic. Commodity prices have been rising. Financial conditions remain easy. Capital is flowing back to emerging markets. So that is the global outlook.
And two, these countries have shown their own resilience. Their economic policies have been sound and they’ve been able to conduct countercyclical policies. They’ve not experienced a financial crisis in these episodes. Their overall fundamentals are sound, so the combination of maintaining sound fundamentals and right economic policies with improvement in the global economic outlook implies a recovery.
Even with this recovery, the trend was 5.5 percent growth for the last eight or so years. Now we’re expecting only 3.8 percent. Of course, it’s much better than last year when there was a contraction, but it’s still below potential and below trend for 2010 in our view. We’re less bullish than some of those houses that suggested Latin America actually could go back to potential growth next year.”