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Global Forecasts Updated in Wake of Credit Crunch

This year is marked by higher than baseline levels of uncertainty, brought on by the downstream effects of the sub-prime meltdown, continuing weakness in the dollar, and the first whispers that the United States – by far the world’s largest economy, with 34% of world GDP – is in fact already in recession.

Latin America continues to be relatively shielded from the global credit crunch, aided by more resilient macroeconomic policies, strong fundamentals heading into the event itself, and limited exposure to the affected institutions.

Food Retail Giants Refocus On Latin America

Global retailers like Wal-Mart, Carrefour and Casino established footprints in Latin America during the 1990s, but the economic downturn following 2001 shifted their strategic focus to other emerging markets.

While global retailers were preoccupied with Asian entries, Latin America became economically stable, experienced a rise in disposable incomes and discovered credit. Consumer demand has responded emphatically with some of the fastest sales growth worldwide that could prompt a new wave of modern retail expansion in the region.

Development Economics Upside-Down: How Latin America Subsidizes the American Way of Life

The growing populist sentiment in the United States against illegal immigration likes to point out that not only do these migrants steal U.S. jobs, they also send $50 billion back to Latin America each year instead of spending it in the United States. In fact, the approximately $2,000 per year sent home by the average working illegal migrant is less than 15% of what he earns in the United States and far less than what he contributes to the U.S. economy. A lesser known fact is that wealthy Latin Americans hold $1.9 trillion in U.S. assets and inject more than $100 billion in new investment each year into the U.S. market, more than all remittances, direct foreign investment and aid combined that flows from the United States to Latin America.