(23 April 2013) On average, Latin American and Caribbean countries will grow by 3.5% in 2013, thanks to buoyant internal demand and the improved performance of Argentina and Brazil compared with 2012, according to new projections presented today by ECLAC.
The Economic Commission for Latin America and the Caribbean launched its Updated economic overview of Latin America and the Caribbean 2012, which updates the figures and information from last December's Preliminary overview of the economies of Latin America and the Caribbean 2012.
The 2013 results are partly due to the expectations of higher growth in Argentina (3.5%) and Brazil (3.0%), thanks to the upturn in agricultural activity and investment (which fell in those countries in 2012).
The regional expansion is also backed by ongoing growth in consumption in the wake of improved labour indicators and rising bank credit to the private sector (and, to a lesser extent, investment). This has combined with consistently high prices for raw materials, which are expected to remain elevated despite falling in relation to levels seen in 2012.
In the new report, which was released online exclusively on Tuesday, the United Nations agency predicts regional growth that is slightly lower than the estimate provided in December (3.8%). This is mainly due to the ongoing uncertainty about the future of the world economy, sluggish developed economies and a less dynamic recovery than expected in Argentina and Brazil.
Paraguay will lead growth in 2013, with an expected rise in GDP of 10%, followed by Panama (8.0%), Peru (6.0%) and Haiti (6.0%). The Plurinational State of Bolivia, Chile and Nicaragua will grow by 5.0%, while Colombia will expand by 4.5% and Uruguay by 3.8%.
Mexico, with expected growth of 3.5% in 2013 and the Central American economies, plus Cuba, Haiti and the Dominican Republic (3.8%) are expected to benefit from a more buoyant United States economy, combined with improvements in the agricultural sector (especially in Cuba, Nicaragua and the Dominican Republic) and the construction sector (in Guatemala, Haiti and Honduras).
South American countries, which tend to be more specialized in the production and export of raw materials, will grow on average by 3.5% in 2013, thanks to continued growth in the Asian economies. This will have positive repercussions on the level of revenues and the performance of export activities.
The Caribbean growth rate will continue to accelerate, with an expected increase of 2.0%, on the back of the buoyancy of economies specialized in producing and exporting raw materials (mainly Guyana and Suriname) and the recovery in countries more focused on exporting tourist services (as a result of the improved economic situation in the United States).
Final overview of 2012
According to ECLAC, Latin American and Caribbean GDP grew by 3.0% in 2012, as a result of a subdued growth in the world economy (due to the recession in Europe, slower growth in China and slow growth in the United States).
In terms of subregions, South America grew by 2.5% whereas Central American countries, Cuba, Haiti and the Dominican Republic expanded by 4.3% (compared with the initial respective predictions of 2.7% and 4.2%). The 0.9% rise in Caribbean GDP represents faster growth than in 2010 and 2011.
Internal demand was one of the main drivers of regional growth over the past year, and it was based on good labour indicator performance, increased credit to families and - in the case of Central America and the Caribbean - higher migrant remittances.
Trade, construction and financial services to businesses were the fastest growing sectors, while gross national disposable income grew at almost the same rate as GDP, with external regional saving also rising.
In addition, inflation fell to a regional average of 5.6% in 2012, compared with the 6.8% posted in 2011.
The ECLAC report adds that the open urban unemployment rate dipped slightly last year from 6.7% to 6.4%. Unemployment reached a new 20-year low, with the absolute jobless figures falling by 400,000. However, there are still around 15 million people looking for work in the region's urban areas.
Slower growth in the world economy affected Latin American and Caribbean trade, as the region's export values rose by just 1.6% in 2012, compared with 23.9% in 2011. Meanwhile, import values also fell from 22.3% in 2011 to 4.3% in 2012.
- Table. Latin America and the Caribbean. Total GDP, 2010-2013
- Complete document: Updated economic overview of Latin America and the Caribbean 2012
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