Clouds gather over positive global economic outlook

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According with the World Economic Forum on Latin America.

Santiago de Chile (WEF). Despite a relatively upbeat outlook of strong economic growth into 2007/8, there are a number of dark clouds on the horizon that threaten the Latin American Goldilocks scenario. Panellists in a session at the World Economic Forum on Latin America listed them as a potential overheating in Asia; a further deterioration in the US housing sector which could cause a sharp slowdown in US consumer spending; and a global re-appreciation of risk.

The regional GDP growth rate is forecasted to be in the vicinity of 4.5-5%. This represents a continuation of recent economic growth in the region (which has seen an increase in GDP per capita of 16% in four years), and is more than double the region’s long-running average of 2.5% growth.

The long-term energy outlook was also discussed, with agreement that recent trends in world demand represent a long-term sectoral shift due to the emergence of China and India (with China alone representing 30% of the growth in oil demand over the past 10 years). The need for huge investments to enact a suitable supply-side response was emphasized.

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