Mexico's Carstens Warns on US Debt Threat to LatAm LatinFinance
go to original October 14, 2013

In just 3 days, the US will be forced to make a decision that will affect the entire global economy. If lawmakers don't find a way to re-open the frozen government, and then agree to raise the national debt ceiling, if that happens, the shock would be felt well beyond its own borders. For more on the potential price of this political stalemate in the US and its effect on the global economy, RT is joined by economist Peter Westin. (RussiaToday)

Latin America’s slowing economies could face “very severe” repercussions if US lawmakers fail to raise the government’s debt ceiling, Mexico’s Central Bank Governor Agustin Carstens warned in an interview with LatinFinance.

“If there is a major breakdown [in US debt ceiling talks] and this is a prolonged issue, the consequences could be very serious,” Carstens said.

His comments came as congressional leaders in Washington failed this weekend to break an impasse to avoid a possible sovereign default when its borrowing cap expires on October 17.

Carstens said that Mexico’s economy – which has disappointed following a sharp slowdown in growth this year – could face severe headwinds if a deal is reached in Washington that chokes off US growth as a result of sharp spending cuts. In the case of a default, “the shock would be very strong,” he added.

Read the rest at LatinFinance

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