LatAm Recovery Underway

LatAm and the Caribbean are showing signs of stabilization and recovery, according to the IMF’s World Economic Outlook report. However, it states the region’s GDP should still contract by 2.5% in 2009 before growing by 2.9% in 2010. There are indications that a recovery got under way during the Q2 2009, according to the report, and it should gather moderate speed in the second half of the year, led by Brazil. Capital flows have begun to return to the region, and sovereign spreads have narrowed. Industrial production has picked up in many economies, notably Brazil, and the contraction in Mexico is moderating, says the IMF. The recent rebound in commodity prices is also improving the overall outlook for the region thanks to a pickup in commodity exports. Consumer and business confidence have also improved, and retail sales have firmed up, the report indicates.