IMF’s Robinson Says, Rise in Latin America’s Borrowing Costs is expected

An International Monetary Fund official said today that Latin America and the Caribbean should see a rise in the borrowing costs as they emerge from the global recession, which makes it harder to stabilize debt levels.

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Statement of IMF’s David Robinson

David Robinson, who is the deputy director of the IMF’s Western Hemisphere department, said in Istanbul today that it is indicated by the past experience that the region’s borrowing costs rise by 15 basis points for every 10 percent increase in U.S. debt as a percent of gross domestic product.

That would make it difficult to carry out any fiscal adjustments that are needed for stabilizing still “quite high” debt levels.

This year GDP will probably shrink 2.5%

The IMF said in its World Economic Outlook yesterday that the region’s economy may expand 2.9% next year which is aided by a return of capital and rebounding commodity prices, this expansion is faster than the 2.3% that was estimated in July. It is further said that this year the GDP will probably shrink 2.5%.

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