LatAm to grow 2.8 pct in '98, 4.5 pct in '99 -WDR
Reuters, Tuesday, August 04, 1998 at 22:42
SANTIAGO, Aug 4 (Reuters) - Latin America's growth in gross
domestic product is set to slow to 2.8 percent in 1998 due to
the Asian crisis but then pick up to 4.5 percent in 1999 on
renewed investment, a top analyst at Warburg Dillon Read said
Tuesday.
"Last year the region grew 5.2 percent, and this year it is
expected to be 2.8 percent with a tendency to be perhaps a
little lower," Walter Molano, executive director of WDR's Latin
American Economic and Financial Research, told reporters while
in Chile.
"For the next year, (GDP) will begin to grow much more
rapidly at 4.5 percent," he said, attributing the expected rise
to a healthier outlook in Brazil and an increase in capital
inflows in Latin America, especially in Brazil.
"Brazil is beginning to recover more than anything because
the elections will be over, confidence will return to the
markets and investment will be the motor of growth," he said.
Brazilians vote on October 4 to elect a president, state
governors and representatives and a large part of the national
Congress.
Growth has slowed this year because less money is pouring
into the region, he said. Net inflows of private capital to
Latin America totalled $91.1 billion last year and will slip to
$71.7 billion this year but rebound to $82 billion in 1999, he
said.
"A new stage is coming. Latin America is going to attract a
lot of direct investment, and the big destinations are going to
be Brazil and Mercosur," he said.
He was referring to the trade bloc that groups Argentina,
Brazil, Paraguay and Uruguay and has Chile and Bolivia as
associate members.
As a sign of the capital inflows to come, Molano pointed to
last week's $19 billion privatisation of Brazilian
telecommunications concern, Telebras (NYSE:TBR) (SAO:TELB4).
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