In 1993 the international economy continued to exhibit mixed trends resulting in both advantages and disadvantages for Latin America and the Caribbean. The growth rates recorded by the industrialized countries remained at a low level for the fourth year in a row, and as a result commodity prices continued their downward trend. Latin America’s exports, which still consist largely of raw materials, were thus adversely affected. At the same time, there was also a downward trend in inflation rates. The combination of slow growth and very low inflation enabled the industrialized countries’ Central Banks to substantially reduce interest rates, and this entailed a double advantage for the Latin American countries: service payments on the external debt declined, while the meagre rates of return on financial assets in foreign markets prompted investors from the United States and other countries to include a higher proportion of Latin American securities in their portfolios.

Related Subject(s): Economic and Social Development
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