Bloomberg News

Lagarde Suggests Latin America Safeguards Against Europe Crisis

November 27, 2011

Nov. 25 (Bloomberg) -- Christine Lagarde, managing director of the International Monetary Fund, said Mexico needs to implement structural reforms and Brazil should increase domestic savings.

Mexico should keep a “keen eye” on conditions in the United States and Europe, and Peru would benefit from continued reforms to achieve more inclusive growth while preserving macroeconomic stability, Lagarde said today on the IMF’s blog.

While Latin America is enjoying sustained growth and reduced vulnerability, the region should take “all necessary precautions” to prepare for any storms that come out of Europe, Lagarde said. The region should maintain prudent fiscal policies, although those policies should not come at the expense of social programs or productive investment in education or infrastructure, Lagarde said.

Lagarde is visiting Brazil, Peru and Mexico next week starting with Peru on Nov. 28.

Latin American countries “should continue rebuilding buffers, including by maintaining prudent fiscal policies -- this would create room for maneuver should the economic situation turn sour,” the blog states.

To contact the reporter on this story: Nacha Cattan in Mexico City at ncattan@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net


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