Latin America eyes economic rebound, officials say

SINGAPORE - Latin America, led by Brazil and Mexico, is poised to rebound next year from recession thanks to improving export demand and higher prices for commodities such as oil and copper, regional economic officials said Thursday.

Brazil, the world's eighth-largest economy, is expecting 9 percent growth in the fourth quarter and a 5 percent expansion next year amid surging domestic consumer demand and signs of a pickup in exports, Deputy Trade Minister Welber Barral told reporters on the sidelines of a yearly Latin American business conference in Singapore.

Mexico is eyeing 3 percent growth in 2010 after a 7.2 percent contraction this year while Chile expects a 5 percent expansion following a 1 percent drop.

A growing consensus for sounder fiscal polices, more robust banking systems and bigger stockpiles of international reserves helped contain the damage from the global financial crisis, said Luis Alberto Moreno, president of the Inter-American Development Bank.

"Latin America felt the full force of the world market crash," Moreno said. "But unlike in previous crises, now these downturns no longer need translate into lost decades."

Brazil expects to tap into its domestic market of more than 190 million people as demand for its exports slowly recovers. Sales abroad, which will likely fall 22 percent this year, have shown signs of life recently, with a 20 percent increase in exports to the United States last month, Barral said.

"The domestic market is really growing now," Barral said. "The consumer is really spending, and that has sustained our overall growth."

Brazil has also capitalized on growing investor confidence since President Luiz Inacio Lula da Silva took power in 2003. The South American country will likely draw more than $40 billion in foreign direct investment next year, up from more than $30 billion this year, Barral said.

Mexico is also trying to spur investment and consumer spending with policies such as cheap credits for small businesses, said Economy Minister Gerardo Ruiz Mateos.

Mexico, which relies on the U.S and Canada for 79 percent of its exports, was perhaps the Latin country hardest hit by the global slowdown as demand collapsed for the nation's big-ticket products such as cars and appliances.

"Those are exactly the kind of products the Americans aren't spending on right now," Ruiz Mateos said. "But sooner or later, our export pillar will return."

"The real lesson is to increase the internal market," he said.

If nothing else, officials expect next year will benefit from favorable comparisons to the worst global slump in decades.

"It's going to be a very good year in Chile next year, because basically this year was rotten," Maria Olivia Recart, Chile's finance vice minister, said on the sidelines of the regional Asia-Pacific Economic Cooperation forum.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.