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Latin America: a boom, for now.

All that oil, soy and steel sent abroad is beginning to have a big impact on Latin America's economic output. High global prices for commodities have buoyed economies big and small, as traditionally export-heavy countries in the region enjoy the windfall. Colombia, Mexico, Ecuador and Venezuela are the main beneficiaries on high oil prices, while Chile, Jamaica and Peru enjoy better returns on metals exports.

High prices for many agricultural goods, too, are helping support Argentina, Bolivia, Brazil and Paraguay, as well as Ecuador. High foreign income plus easier money and a nascent domestic reactivation are pushing the region's total gross domestic product into line with world growth, which should end 2004 at 5% and is expected to reach 4.3% in the coming year, according to the International Monetary Fund (IMF).

But governments must make changes that will sustain growth, according to Raghuram Rajan, the IMF's economic counselor and director of research.

"Countries should use the relatively benign environment to recreate the room for policy maneuver that was given up while ensuring the recovery," Rajah says. "There is also no better time for reform than the present, when recent adversity reminds citizens of the cost of standing still."

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Title Annotation:Indicators
Author:Brown, Greg
Publication:Latin Trade
Article Type:Brief Article
Geographic Code:0LATI
Date:Dec 1, 2004
Previous Article:Hard to swallow.
Next Article:Latin America and the Caribbean.

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