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Latin America better girded for financial crisis

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"Faced with a global downturn the region's largest economies are likely to face a relatively normal business cycle rather than a fully fledged crisis," says Mr. Newman. "That is good news and represents a graduation from the past for some countries in the region."

Still, the region will have to readjust after years of steady growth. Average annual growth rates across Latin America – at 5.1 percent from 2004 to 2008 – are expected to fall hard, with expectations for next year at just 2.8 percent, according to Rahul Ghosh, head of Latin American country risk and financial markets at Business Monitor International in London.

Commodities prices are a key reason. The metals, grains, and livestock that South America sends around the world, particularly to China, helped push Latin America to five years of unstinting growth. Trade surpluses that averaged almost $100 billion a year between 2004 and 2008 are likely to fall to around $23 billion next year, according to a Morgan Stanley report.

The nations that have worked to get their economies in order – such as Brazil, Chile, and Peru – are among the best placed to keep growing next year.

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