Latinnews Archive

Latin American Weekly Report - 25 April 1996

WORRIES ABOUT RECESSION GROW

The leaders of the bankers' association and the Bogota stock exchange joined forces on 10 April to warn that an economic recessin was under way. Stock exchange chief Carlos Caballero Argaez and Asobancaria president Cesar Gonzalez agreed that high interest rates were to blame, and Caballero also mentioned 'uncontrolled' public spending.


Finance minister Guillermo Perry said such fears were unfounded, but admitted that a combination of a crisis in the coffee industry, the ending of the construction boom, interest rates of up to 40% and political uncertainty had led to an economic slowdown. He said interest rates must come down, or the economy could suffer serious damage.

Heavy rains in the main coffee-growing areas are expected to lead to the loss of 1m bags, out of projected exports of 12m bags.

Automobile industry executive Carlos Mattos, of Hyundai, said on 9 April that a 25% drop in car sales so far this year was caused by uncertainty, high interest rates and an increase in value-added tax from 144% to 16% in January.


Return to top