US Crisis Impacts
Central America
San Jose - The economic
catastrophe in the
United States has a
heavy impact on Central
America, due to the
close relations in
trade, investments and
remittances, according
to statements by
International Monetary
Fund (IMF) executives.
The Gross Domestic
Product of the region,
Panama and the Dominican
Republic, could drop
from the average 6.9
percent in 2007 to 4.4
percent the current
year, IMF Central
America Division head
Andreas Bauer predicted.
According to a study,
these economies are in
their best situation in
long time, although the
rise in the prices of
oil and food, adverse
implications of the US
crisis could impose
complex challenges
regarding policies.
It is clear that the
region will be severely
put to a test. There is
concern that this could
be only the beginning of
a significant reduction
of credits, Treasury
Deputy Secretary for
Latin America Brian
O'Neill admitted.
Studies cover economic
integration, income
distribution, customs
union and the capital
market development, said
the Costa Rican daily,
La Nacion. To IMF
economist Rodrigo Cubero,
the reduced foreign
financing availability,
due to the crisis,
demands that the region
reduces the current
account deficit, and
moderate credits and the
domestic demand.
"The credit policies of
public banks should be
in line with this need,"
said Cubero, quoted by
the Costa Rican daily.
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