The Economic Commission for Latin America and the Caribbean (ECLAC) revised its 2017 growth projections for economic activity in the region and foresees an average expansion of 1.2% in Latin America and the Caribbean this year, which is slightly above the forecast from last July. A rebound in the region’s economies is expected for 2018, with growth averaging 2.2%, which would be the highest rate since 2013, the United Nations organization stated today in a press release.
As in the last few years, growth dynamics are seen differing between countries and subregions, ECLAC indicates. The economies of South America, specialized in the production of primary goods (particularly oil, minerals and food), will grow at a positive rate (0.7%) this year after two years of economic contraction. Greater dynamism is expected for this subregion in 2018, when it is expected to grow 2% on average.
Meanwhile, Central America’s economies are forecast to expand 3.4% this year and 3.5% in 2018. For the English- and Dutch-speaking Caribbean, average growth is seen at 0.3% for 2017, a figure that was downwardly revised versus July’s projection, mainly due to the damage caused by the Irma and María hurricanes in some countries of that subregion. In 2018, however, increased dynamism is forecast with a growth rate of 1.9%, influenced in some cases by spending efforts aimed at reconstruction as well as a somewhat more dynamic global context in terms of growth and foreign trade.
According to ECLAC, the capacity of the region’s countries to generate a more dynamic economic growth process that is sustained over time depends on the space for adopting policies that support investment, which will be fundamental for mitigating the effects of external shocks and averting significant impacts on economic performance in the medium and long term.
In this context, bolstering both public and private investment is essential, along with diversifying the productive structure to achieve one with more value added and greater incorporation of technology and knowledge.