Colombia Economy Faces ‘Difficult’ 2009, Roubini Says

by Dave

Bloomberg.com

Colombia has been among the nations hardest hit in Latin America this year and its prospects may not improve as exports fall, said Nouriel Roubini, the New York University professor who predicted the financial crisis.

“It’s going to be a difficult year,” Roubini said in an interview in New York. “Colombia has been hit by the financial and economic crisis more than people expected.”

Colombia “looked in reasonably good shape” coming into the crisis, he said. Growth slumped to 2.5 percent in 2008, hurt by a 22 percent plunge in exports, from 7.5 percent in 2007, the fastest pace in three decades. Colombia’s central bank said April 3 that the economy was weakening more than it expected.

Colombia has been hurt by “trade shocks, the fall of exports to the region and outside and massive reductions from remittances from workers in Spain, who lost their jobs in construction,” Roubini said.

Chile, Brazil and Uruguay are the countries that may perform better in the region in the medium term, Roubini said.

“Those central banks which were more conservative and hawkish on inflation, like Chile and Brazil, can ease more aggressively,” Roubini said.

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