Sunday, June 28, 2009

IMF Communique Re. Meeting in Antigua, Guatemala

“Finance ministers, central bank governors, financial sector superintendents, IMF management and staff, and representatives of other international financial institutions met in Antigua, Guatemala, over the past two days to discuss key policy issues facing the region. The conference focused on the effects of the global crisis on the economies and financial sectors of the region, the policy responses that have been implemented in these countries, and lessons learned to guide future reforms."

“This year’s conference took place against the background of an unprecedented global financial and economic crisis. While the region has not been significantly affected by financial channels, where the crisis originated, economies in the region have been affected as a result of their strong external linkages with the United States and other advanced economies. Conference participants agreed that these shocks pose complex policy challenges, yet stressed that Central America is in a better position to weather the storm today than in the past."

“Participants discussed the impact of the global crisis on the financial systems of the region. While the crisis generated a significant reduction in foreign funding, financial systems in the region have held up well, in part because of a relatively low reliance on external credit and limited exposure to “toxic” assets and also due to the quick response of the authorities."

“Participants noted that the growth outlook in the region will continue to be affected by external developments, and highlighted that the region has adopted appropriate policy measures to mitigate the impact on growth and poverty. In particular, they stressed the increase in conditional cash transfers to vulnerable segments of the population; higher infrastructure spending; and the expansion in funding for health and education programs. Participants also emphasized the beneficial impact on inflation from lower commodity prices, which has allowed greater flexibility to monetary policy in some countries to help mitigate the impact of the crisis on domestic economies. They also welcomed the backing of multilateral lenders in providing increased funding and asked for continued support."

Read the full IMF communique here.

1 comment:

Mark said...

I ran into one of these participants, or so he claimed, and he didn't take kindly to my comment that the region would do well to abandon the dollar as reserve currency and break the addiction to international aid!

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