Latam forecasted to expand 3.2% in 2014Staff writer ▼ | December 13, 2013
In its annual report "Preliminary Overview of the Economies of Latin American and the Caribbean 2013", Eclac points out that less buoyant external demand, greater international financial volatility and falling consumption were the factors determining the more modest economic performance of countries in 2013, which brought down the 3.0% estimate put forward by the Commission in July.
A moderately more favorable external environment should help boost external demand in 2014 and in turn the region's exports. Private consumption will also continue to grow, although more slowly than in previous periods. In the meantime, increasing investment in the region remains a challenge.
The threats facing the region include ongoing volatility in the global economy and higher external financing costs, as well as a smaller consumption contribution to GDP growth and a worsening regional current accounts.
According to the report regional growth in 2014 will be led by Panama (with 7%), followed by Bolivia (5.5%), Peru (5.5%), Nicaragua (5%), Dominican Republic (5%), and Colombia, Haiti, Ecuador and Paraguay (all four with 4.5%). Growth is predicted to be 2.6% in Argentina and Brazil, 4% in Chile and Costa Rica, 3.5% in Guatemala, Mexico and Uruguay, and 1% in Venezuela.
According to Eclac in 2013 domestic demand made a smaller contribution to regional growth owing to a slowdown in wages and consumer credit. The slightly higher contribution by investment and the smaller negative impact of net exports failed to offset reduced domestic demand.
This year, regional growth was led by Paraguay (13%), followed by Panama (7.5%), Bolivia (6.4%), Peru (5.2%), Nicaragua (4.6%), Uruguay (4.5%), Argentina (4.5%) and Chile (4.2%).
The unemployment rate remained more or less stable, going from 6.4% in 2012 to 6.3% in 2013 and inflation remained below 5% in most of the region's countries. ■