Brasília – Latin America and the Caribbean have already consolidated the economic recovery that started in the second half of 2009 and should grow by 5.2% this year. The conclusion was drawn by the Economic Survey of Latin America and the Caribbean 2009-2010, disclosed today (21st) in Chile by the Economic Commission for Latin America and the Caribbean (Eclac). The document states that the region’s per capita GDP should grow by 3.7% this year and by 3.8% in 2011.
According to the UN agency, Brazil will be the country in the region whose Gross Domestic Product (GDP) should increase the most, by 7.6%; followed by Uruguay (7%), Paraguay (7%), Argentina (6.8%) and Peru (6.7%). Next, with lower rates of growth, come the Dominican Republic (6%), Panama (5%), Bolivia (4.5%), Chile (4.3%) and Mexico (4.1%). Colombia should grow by 3.7%, Ecuador and Honduras, by 2.5%, and Nicaragua and Guatemala, by 2%. The Venezuelan economy should post a decline (-3%), as well as that of Haiti (-8.5%), which is still suffering the consequences of the earthquake last January.
The Eclac underscores that growth rates in the region are exceeding previous forecasts and are very heterogeneous, the highlights being the Mercosur countries and those that were better able to implement public policies. The Eclac’s data also show that, generally, “the higher level of regional economic activity impacted positively on the labour market, reducing unemployment in the region from 8.2% in 2009 to 7.8% in 2010.”
The survey also points out that some of the region’s economies consolidated their growth in 2010 thanks to domestic consumption, which reacted well to the improved labour market indicators, the expansion of credit, increased investment and, to a lesser extent, increased imports.
“The macroeconomic strength displayed by most Latin American and Caribbean countries in the years that preceded the international crisis made a significant difference. The countries took advantage of an exceptional period of prosperity in economy and international finance to consolidate their public finances,” claims the document. Furthermore, indebtedness has decreased, the indebtedness profile has improved, and foreign exchange reserves have grown.
Thus, according to the survey, more room was cleared for measures to fight the crisis, enabling recovery to take place in the second half last year. For 2011, the Eclac admits that even though recovery has taken place relatively swiftly, “there are still doubts and uncertainty regarding the global economic evolution, and they may obscure the regional scenario in the mid term.”
One of the reasons is the Euro zone crisis, which, according to the Eclac, alongside other factors, may impact negatively on exports. The survey also shows that there is cause for concern over some Caribbean economies, which have high debt rates, such as Grenada (83%) and Barbados (93%).
The Eclac forecasts that the rate of growth should decrease in the second half, and claims that even though there should be an increase in 2011, the rates will be lower, at around 3.8%, equivalent to growth of 2.6% in per capita production.
“Considering this scenario, the Eclac calls on the countries to maintain public policies geared towards protecting the more vulnerable sectors as part of a broader strategy, one that involves not only the social area, but also macroeconomic and production policies.”
*Translated by Gabriel Pomerancblum
