IIF Sees Moderate Growth Deceleration

New data from the Institute of International Finance (IIF) predicts a moderate slowdown in growth across the board in LatAm through 2009. Regional expansion is forecast to ease to 4.4% in 4.1%, respectively, in 2008 and 2009, from 5.3% last year. This includes a decline this year to 2.7% in Mexico (versus 3.2% in 2007) and 4.6% Brazilian growth, from 5.4% last year. However, the IIF foresees a pickup in Mexico to 3.5% next year. Peru is set to fall from 8.5% in 2007 to 6.5% and 6.0% in the next few years, while the corresponding figures for Argentina are 8.7%, 6.8% and 4.2%, and for Colombia 7.1%, 5.1% and 4.5%. Inflation is meanwhile set to hit 6.4% this year, up from 6.0% in 2007 and 4.8% in 2006, says the IIF. It expects monetary policy to hold or tighten in coming months in Brazil, Chile, Colombia and Peru. Mexico meanwhile looks set to ease in the second half. “Most of the countries have shown solid growth in their economic activities and most of it comes from the domestic demand. Investors are optimistic,” says Carola Sandy, analyst at Credit Suisse.