Easy financing conditions and favorable terms of trade have fueled credit and domestic demand in much of Latin America for more than a decade, with only a short interruption during the 2008–09 global crisis (Figure 11.1). The credit expansion has been particularly impressive for the mortgage sector, where legal reforms and government subsidies have also played a role. This strong growth—from generally low mortgage credit levels—to a large extent reflects a process of financial deepening necessary to address the significant housing deficits in the region (Figure 11.2).1

Contributor Notes

This chapter updates an earlier work published as Cubeddu, Tovar, and Tsounta (2012).
New Challenges to Growth and Stability