Brasília – The Economic Commission for Latin America and the Caribbean (Eclac) has revised down its economic growth projections for Brazil and the region this year. The growth estimate for the Gross Domestic Product (GDP), i.e. the sum of all goods and services produced in the country, has dropped from 2.3% to 1.4%. The projection for Latin America and the Caribbean is down from 2.7% to 2.2%.
According to the Eclac, the downward revision is a consequence of weak external and internal demand, insufficient investment and limited space for implementation of policies designed to spur the economy.
The 2014 Economic Survey of Latin America and the Caribbean shows that the economic slowdown seen in Q4 2013 persisted through the early months of 2014, and as a consequence the region will grow at a lower rate than last year’s 2.5%. The survey points out, however, that a potential improvement in performance of some of the world’s leading economies may lead to a shift in this trend towards the end of 2014.
According to the Eclac, the resumption of economic growth in the United States will benefit Mexico and Central American countries, while the rebound in the United Kingdom and several Eurozone economies will have a positive impact, especially on the Caribbean, due to higher tourist inflows.
The lower growth expected in China in 2014 is the main potential hazard, according to the survey. The region’s economies with an emphasis on exporting raw materials to China may suffer, in case the latter’s economic fails to keep growing at rates higher than 7%.
In the region, growth in 2014 will be topped by Panama, whose GDP should be up 6.7%. Next on the list are Bolivia (5.5%), Colombia, the Dominican Republic, Ecuador and Nicaragua, with 5% rates. Argentina should see a meagre 0.2% GDP increase, and Venezuela’s GDP should be down 0.5%.
*Translated by Gabriel Pomerancblum
