São Paulo – The Economic Commission for Latin America and the Caribbean (Eclac) said this Tuesday (7th) that it has slashed its 2015 economic growth forecast for the region to 1%. The previous projection, issued in December, was of 2.2% growth.
In a statement, Eclac said the revision “reflects a global scenario characterized by worse-than-expected economic dynamics than in late 2014.” The region’s economic growth in 2015 should be close to last year’s 1.1% rate, as per Eclac’s own documents.
According to the organization, growth forecasts for industrialized economies were also revised down, exception made for the United States, and emerging countries are in the process of slowing down. Other factors include higher volatility on the international financial system, stemming from implementation of expansionistic monetary policies throughout Europe and Japan and the expected USA interest rate hike.
Eclac sees South American growth nearing zero this year, whereas its December forecast had been of 1.8% growth. It expects Central America and Mexico to grow by 3.2% and the Caribbean, by 1.9%. According to the organization, the end of commodity price hike is detrimental to several Latin American countries.
The projection for South America is more pessimistic because its countries are raw material producers and exporters, and global demand for said items has cooled off. In turn, Central American and Caribbean economies with stronger ties to the United States and with more to profit from the cheap oil will tend to fare better.
The Eclac believes the Latin American countries that will see the most growth in 2015 are Panama (6%), Antigua and Barbuda (5.4%), and Bolivia, Nicaragua and the Dominican Republic, all of which are expected to grow by 5%.
*Translated by Gabriel Pomerancblum
