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Saturday, May 3, 2025

Eclac: Regional growth to rebound in 2015

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20141203

SAN­TI­A­GO–Eco­nom­ic growth in Latin Amer­i­ca and the Caribbean will re­cov­er in 2015 and reach 2.2 per cent on av­er­age, ac­cord­ing to new es­ti­mates un­veiled yes­ter­day by the Eco­nom­ic Com­mis­sion for Latin Amer­i­ca and the Caribbean (Eclac).

Ac­cord­ing to the re­gion­al Unit­ed Na­tions or­ga­ni­za­tion, this mod­er­ate rise will take place in the con­text of the glob­al econ­o­my's slow and het­ero­ge­neous re­cov­ery, with down­ward pres­sure on com­mod­i­ty prices and lit­tle dy­namism in the re­gion's ex­ter­nal de­mand as well as an in­crease in fi­nan­cial un­cer­tain­ty.

The evo­lu­tion of the glob­al econ­o­my will have dif­fer­ent im­pacts among coun­tries and sub-re­gions in 2015, as it did through­out 2014. Cen­tral Amer­i­ca plus Haiti and the Span­ish-speak­ing Caribbean are ex­pect­ed to grow at a rate of 4.1 per cent, South Amer­i­ca at 1.8 per cent, and the Eng­lish-speak­ing Caribbean at 2.2 per cent.

The coun­tries lead­ing the re­gion­al ex­pan­sion next year will be Pana­ma, with an in­crease in its Gross Do­mes­tic Prod­uct (GDP) of sev­en per cent, Bo­livia (5.5 per cent), Pe­ru, the Do­mini­can Re­pub­lic and Nicaragua (five per cent).

In 2014, av­er­age re­gion­al growth was just 1.1 per cent, mark­ing the small­est ex­pan­sion since 2009. The re­gion's per­for­mance shows great het­ero­gene­ity among coun­tries and sub-re­gions: Cen­tral Amer­i­ca plus Haiti and the Span­ish-speak­ing Caribbean grew 3.7 per cent, South Amer­i­ca 0.7 per cent, and the Eng­lish-speak­ing Caribbean 1.9 per cent.

In fis­cal terms, Latin Amer­i­ca will reg­is­ter a slight in­crease in its deficit to 2.7 per cent of GDP in 2014 from 2.4 per cent in 2013, while the Caribbean will re­duce its deficit to 3.9 per cent in 2014 from 4.1 per cent last year. In ad­di­tion, the pub­lic debt of the re­gion's coun­tries will re­main at low and sta­ble lev­els, av­er­ag­ing around 32 per cent of GDP.

Mean­while, ac­cu­mu­lat­ed re­gion­al in­fla­tion in the 12 months to Oc­to­ber was 9.4 per cent on av­er­age, with a very di­verse per­for­mance among coun­tries, and the ur­ban open un­em­ploy­ment rate will reg­is­ter a fresh de­cline to 6 per cent from 6.2 per cent the pre­vi­ous year, de­spite the weak job cre­ation re­sult­ing from low eco­nom­ic growth.

The de­cel­er­a­tion in in­vest­ment ob­served since 2011, and which showed a rough­ly 3.5 per cent con­trac­tion dur­ing 2014, is an im­por­tant fac­tor in the de­cline of the GDP growth rate.These fig­ures were pre­sent­ed dur­ing a press con­fer­ence at Eclac's head­quar­ters in San­ti­a­go, Chile, by the Com­mis­sion's Ex­ec­u­tive Sec­re­tary, Ali­cia B�rce­na, and are part of the an­nu­al re­port Pre­lim­i­nary Overview of the Economies of Latin Amer­i­ca and the Caribbean 2014, which will be pub­lished soon.

"To in­vig­o­rate eco­nom­ic growth and stop de­cel­er­a­tion in the glob­al econ­o­my's cur­rent con­text en­tails sig­nif­i­cant chal­lenges for the re­gion," B�rce­na said dur­ing the press con­fer­ence."Among these, it is nec­es­sary to re­vive do­mes­tic de­mand pri­ori­tis­ing the dy­nam­ic of in­vest­ment. This should im­pact pos­i­tive­ly on the economies' pro­duc­tiv­i­ty and com­pet­i­tive­ness."

To that ef­fect, Eclac pro­pos­es ex­pand­ing the coun­ter­cycli­cal macro­eco­nom­ic ar­chi­tec­ture to in­cor­po­rate mech­a­nisms that pro­tect in­vest­ment fi­nanc­ing, par­tic­u­lar­ly that of in­fra­struc­ture, through the dif­fer­ent phas­es of the cy­cle.

At the same time, re­gion­al in­te­gra­tion must play a lead­ing role in in­creas­ing re­gion­al ag­gre­gate de­mand, sup­port­ing progress on pro­duc­tiv­i­ty by in­clud­ing coun­tries' com­pa­nies in re­gion­al val­ue chains, and strength­en­ing the re­gion's abil­i­ty to han­dle ex­ter­nal shocks through fi­nan­cial in­te­gra­tion.


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