Regional Economic Outlook Entrenching Stability and Raising Long-term Growth

The Regional Economic Outlook: Western Hemisphere briefly covers developments in the United States and Canada, and, in more detail, developments and prospects in Latin America and the Caribbean (LAC). 2006 was one of the best years in decades for the LAC region, but can this be sustained? Going forward, what challenges and risks does the region face? After reviewing the macroeconomic prospects and risks, particular attention is paid to the financial sector, balance of payments, and fiscal developments.This upcoming publication examines two critical questions in more depth. How sensitive is Latin America to changes in the external environment? Using cutting edge econometric analysis, this volume contains a detailed quantitative analysis of the response of growth in Latin America to a variety of external shocks - including to world growth, growth in the United States, international interest rates, emerging market financial conditions, and commodity prices - and shows how growth in the region is likely to evolve conditional on a variety of external scenarios.What can the region do to raise Latin America's long-term growth to the level of faster developing regions, and to make growth more sustained? This section includes a comparison with investment and productivity growth patterns elsewhere and simulations that illustrate the consequences of specific growth-enhancing policies, and analyzes how the region compares today with regard to the factors that determine countries' prospects for sustaining economic expansions.