Latin America rides the commodities boom

Overall, the last several years have been good economically to Latin America, as the region pulled out of a general recession. A few factors have contributed to the healthy growth, primarily higher global commodity prices that have bolstered exports and more fiscally responsible government policies. As a result, many Latin American currencies have been on strong appreciation tracks.

“Latin America has had unprecedented positive external conditions to work with over the past several years,” says Rafael de la Fuente, chief Latin American economist at BNP Paribas.

Strong global growth led by Asia and higher commodity prices were two of the main factors that supported a healthy 5.7-percent gross domestic product growth rate for the region in 2004 — the highest level in approximately a decade.

The question is whether this strength is an indicator of a sea-change for Latin America or an aberration from its often turbulent past.