Latin America can secure 2018 recovery

The slowdown in Latin America since 2012 has been accompanied by weak and slightly decelerating potential growth, reflecting sluggish productivity, scarcity of fixed investments and demographic changes. Positive global economic prospects for 2018, the regional cyclical recovery, and policy initiatives to lift productivity are presenting Latin America's leaders with the opportunity to alter that trajectory.

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Whither Emerging Markets Foreign Exchange Reserves

After a exponential rise in foreign exchange reserves accumulation by emerging markets from 2000 onwards, the tide seems to have turned south since mid-2014. Changes in capital flows and commodity prices have been major factors behind the inflection, with the new direction expected to remain, given the context of the global economy going forward. Although it is too early to gauge whether the on-going relative unwinding of such reserves defenses will lead to vulnerability in specific emerging markets, the payoff from strengthening domestic policies has broadly increased.

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