...Significant easing of risks related to the fiscal standoff in the US is the most notable change. US fiscal challenges remain over the medium term, though these risks are now less urgent. The region's biggest challenge will be to sustain healthy growth rates as China slows. Fitch forecasts China growth of 7.3% and 7% in 2014 and 2015, respectively. Recent export and manufacturing data support this view. If the current scenario is part of China's rebalancing, a sustained reduction in investment may place pressure on the demand for commodities, long an important contributor to growth in many Latin American countries. Economic reform momentum towards this end continues subdued in the region, with Mexico the notable exception. A hard landing for the Chinese economy is still not our base case. If this were to occur, ratings may see more dramatic change. Credit growth continues to expand in many countries in the region at a double-digit pace, although at a somewhat slower rate relative to rapid...
