The good times are winding down in much of Latin America, and with them ends not only a period of economic growth but very possibly also one of relative political stability. As the global economy and financial markets strain to adjust to a slowdown in China, for years one of the world’s principal engines of growth, no region of the world will feel a more painful punch from the new reality. In fact, the International Monetary Fund’s growth projections show Latin America and the Caribbean with the slowest economies of any major region this year.
Such a sharp deceleration inevitably carries political consequences, and those are already becoming evident.
Economists will calculate the precise economic effect of falling commodity prices, but it will be more difficult to quantify the inevitable political impact of a sharp and sudden drop in government revenues.