Brasília – The Economic Commission for Latin America and the Caribbean (Eclac) has reduced projected growth for the region this year from 3.7%, forecasted in June, to 3.2%. The information was included in the Economic Survey of Latin America and the Caribbean 2012.
According to the Eclac, “the weak global economy, mainly due to the difficulties faced by Europe, United States and China, has affected growth in Latin America and the Caribbean.”
Projections for Brazil also dropped, from 2.7% to 1.6%, the same estimate as that of the country’s Central Bank for 2012. Argentina, the second largest economy in the region, should grow 2% this year, against a prior estimate of 3.5%.
The report points out that Brazil “experienced a stronger slowdown than other countries in the second half of 2011, and it was only in the beginning of the second half of 2012 that some signs of recovery began to appear. In Argentina, the fall was most striking during the first six months of 2012.”
For next year, the forecasted growth of the region is 4%, the same figure as forecasted for Brazil. Argentina should grow 3.5% in 2013.
According to the executive secretary at Eclac, Alicia Bárcena, in 2013, expectations for Brazil and Argentina, which has considerable weight on the regional economy, resulted in greater optimism for growth of the region. “Growth will recover slowly in 2013, especially due to the greater growth of Brazil,” said Alicia, on presenting the report in Santiago, Chile, in a teleconference.
According to the report, private consumption has been the main booster of regional expansion, due to the favourable evolution of the market, the growth in credit and, in some cases, fund transfers from abroad to the countries in the region. “However, the dramatic slowdown in external demand and the downward trend in the prices of most export commodities have made foreign trade the main way in which international crises have been passed on to the region’s economies,” informs the Eclac.
Regarding inflation, the report shows that the tendency for reduction has been maintained in the second quarter of 2012, with average accumulated variation of 5.5% in the twelve months up to June, a value below that recorded since November 2010. According to the Eclac, that is “thanks to smaller increases in food prices”.
*Translated by Mark Ament
