There is no “good times”, it is time to reform: Lagarde – The Economist

by slowdown in China, came to an end the cycle of high commodity prices

It is necessary for authorities to promote structural reforms.

Christine Lagarde, managing director of the IMF International. Photo: AFP

Latin America should promote a program of reforms to grow because it was “good times” for commodities ended the slowdown in China, said Christine Lagarde, managing director of the International Monetary Fund (IMF) to the Peruvian press.

“It is important that everyone understands that times of fat cows ran for raw materials which provided many favorable growth impulses in the region, “Lagarde said in an interview published by the Peruvian newspaper El Comercio.

According to Lagarde,” China’s slowdown has had negative effects on prices raw materials worldwide and, in turn, has affected the economic prospects of exporting countries in Latin America, such as Chile and Peru. “

” With this in mind and to avoid prolonging the period of low growth, Latin American authorities should launch an ambitious program of structural reforms, “the head of the IMF recommended no further.

Lagarde’s remarks occur when six months remaining before hosting in Lima October at the joint meeting of the IMF and the World Bank (WB), in an event that will mark the return to Latin America, 48 years after these meetings will be held in Rio de Janeiro, since 1967.

Last December, the IMF warned that Latin America will expect a tepid recovery in 2015, following a fall in investment and end the cycle of high prices of raw materials.

According to IMF projections, Latin America have grown 1.3% in 2014 and 2.2% is expected in 2015.

The head of the IMF recommended that the authorities of Peru, considered by multilateral financial institutions one of the star economies of the region, “accelerate structural reforms to boost growth potential and further strengthen social inclusion.”

“A resolute implementation of the reforms, also markets work- improve productivity, investment, human capital and formal employment, “he said Lagarde.

In the case of Peru, the number one associated recovery IMF in 2015 and medium term, inter alia,” to production of new mines grow to full capacity “, beating consensus based social unrest generated among environmental groups mining.

Mexico arrives with two bond issues

Mexico will sit among the 183 member countries of the International Monetary Fund and the World Bank with the explicit distinction of having made two sovereign bond issues and the inclusion of collective action clauses proposed by the IMF itself to avoid conflicts such as Argentina with its bondholders.

But he also gets to show that not enough to be the valedictorian of the class, with an approved structural reforms to solve the problems of short-term growth, says director careers in economics at the School of Business at ITESM, Raymundo Tenorio.

Meanwhile, Katherine Rooney, macroeconomic strategist at Capital Markets, recognizes that Mexico remains an attractive and promising market for investors, despite the delay in the implementation of the approved reforms and slow growth.

“Compared to their peers in the region, talking about the case Brazil and Mexico there is a breakthrough offers the opportunity to invest in development fields strategic as oil, which definitely be positive even if delayed “he says.

If anything there is some disappointment over Mexico acknowledges, has to do with the slow process of implementation of reforms. But beforehand foreign investors knew it would take time to change, he acknowledged.

Raymundo Tenorio emphasized that Mexico comes to this meeting as one of the few member economies that have already done what was called the Washington Consensus. This, by approving a set of economic and financial reforms recommended by the IMF particularly after the crisis of 2008.