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LatinAmericaMiddleEastandNorthAfricaRegionAfricaHavingweatheredtheglobaldownturncomparativelywelltheregionhashostedastrongrecovery.Accommodativegovernmentpolicieshavehelpedunderpinstrongdomesticdemandandgoodeconomicfundamentalshavehelpedtoattractforeigncapitalinows.HighercommoditypricesareofcoursehelpingtosupportgrowthinmanyoftheLatameconomiesgiventheirdependenceoncommodityrelatedearningsatrendwhichmaycalmnearterm.SpecicallyBrazilsGDPgrowthhasbeendrivenbyincreasingdomesticdemand.Onthepositivesideunemploymenthasbeenfalling.OnanegativenoteastrongRealhasreducedthecompetitivenessofthenationsexports.FurthermoreaswithitsotherBRICpeersrisinginationpresentsaneartermconcern.Brazilsgovernmenthasstatedtheneedforscalausterityalthoughhowthiscanbeimplementedwhileupgradinginfrastructureandincreasingsocialprojectsremainstobeseen.MeanwhilethecentralbankistakingaveryactiveroleintryingtocontroltheappreciationoftheReal.TheMENAregionisgrowingoutofitsowndownturnatareasonablepacehelpedbyhighercommoditypricesoildemandforitsexportsandsupportivegovernmentspending.Consequentlygrowthlookssettobeatc.5intheyearahead.OnthenegativesideavulnerablenancialsectorandpropertymarketshavebeenlesskindtoKuwaitandtheUAE.WhilsttheriskofacollapseintheoilpriceposessignicantriskimplicationsfortheregionthisisamodestriskinourviewespeciallywiththeOPECnationspresentlyunwillingtomeetrequeststoincreaseproduction.OfgreaterconcernistheimpactofaEuropeandownturnonthenon-oilproducingstatesoftheMENAregione.g.TunisiaMoroccoasEuropeaccountsforabouthalfofthesecountriestotalexports.DespitepartsoftheregionbeinghithardbythecollapseinexportandcommoditiesmarketsatthedepthoftheglobalrecessionAfricastillmanagedtoreturngrowthofover2in2009andSub-SaharanAfricaislikelytoseeatleastmid-singledigitgrowthin2011.Therelativelylowdegreeofexposureoftheregionslow-incomeeconomiestointernationaltradeandnancialowsshieldedthemfromtheworstoftheglobaldownturn.Correspondinglytheaccelerationofgrowthinthesesubregionsisexpectedtobemodest.Theprimaryrisktotheoutlookfortheregionisafalteringglobalrecovery.Forthewealthieroil-exportingcountriesoilpricesanddemandthereofremainkey.FormiddleincomeeconomiesthesuccessofEuropetowhichthesecountriesdeliveronethirdoftheirexportscontinuestobeanimportantfactor.67