Latin American countries risk failing to take advantage of the economic growth cycle to make structural changes, according to Fitch Ratings.
“There’s a risk coming from complacency,” Shelly Shetty, the head of Latin America sovereign ratings at Fitch, said in an interview in New York. “A lot of the countries have benefited from the commodity boom and improved their macroeconomic stability, but macroeconomic stability is not a sufficient condition for a higher growth trajectory.”
Improvements in the business environment, market flexibility and investment in education are among the changes the region needs to make, Shetty said.
Latin America is projected to grow 2.94 percent this year, more than double the 1.26 percent pace for the Group of 10 countries, according to the median forecasts of economists surveyed by Bloomberg.
Oil prices averaged $95.94 a barrel in the past year, 56 percent higher than in the previous decade, according to data compiled by Bloomberg.
Brazil’s infrastructure investment and the Mexican Congress’s overhaul of labor law are “good news” for the region, according to Shetty.
Mexico’s labor legislation was approved by the lower house on Sept. 29 and if passed by the Senate would make it easier for employers to hire and fire workers.
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