Third World loans falling

Press, 1 April 1985, Page 33

Third World loans falling

NZPA-AP Washington Bank loans to developing countries are on the decline again, according to figures from the International Monetary Fund. .. During the year ended in September 1984 bank lending to non-oil developing countries amounted to SUS 22 billion (SNZ4B.IB billion), compared with SUS 34 billion ($NZ74.46 billion) during the year ended September 1983,” the fund said in a published analysis. Mexico’s debt crisis of 1982, followed by similar crises in Brazil, Argentina, and other big borrowers made bankers wary. Many countries had been able to borrow only enough to help keep up interest payments on old loans and had been getting little money for new projects that create more jobs and produce more goods, the fund said.

The new drop comes after a period when already low living standards were declining in Latin America and Africa.

Aid from the World Bank, the largest source of intergovernmental lending, was cut back after the United States reduced its contributions to the funds used for easy loans to the poorest countries.

The drop in available funds is expected to hit hard, especially in countries that got used to fast growth in the 1960 s and 19705. But the Inter-American Development Bank said last week that in 1984 the deep recession Latin America had been suffering since 1981 appeared to have come to an end; economic growth was slowly resuming.