Global expansion will continue in 2014 (3.6%) and 2015 (3.9%), this time with a greater contribution from developed economies.
Financial tensions return to emerging economies, but markets will start to differentiate between countries depending on their fundamentals and the soundness of their economic policies.
Latam will grow 2.5% in 2014 and 2.6% in 2015 with increasing differentiation between countries. The Pacific Alliance will grow 3.8% in 2014, while Mercosur will do so by 1.5%.
External deficits will start to go down from 2014 onwards. These deficits are still financed with long-term capital. Even so, the region shows a certain loss of competitiveness in the last few years.
Most countries in the region have good buffers to withstand the Fed’s tapering, but in the light of less expansive financial conditions countries will reflect the difference between their fundamentals more clearly.