Latin American Economic Outlook 2014

Logistics and Competitiveness for Development

image of Latin American Economic Outlook 2014

Latin American economies continue to present relatively stable growth but continued uncertainty with regards to the duration of the commodity boom could pose threats to medium-term growth and economic development. Latin American countries face increasing competition from emerging economies across the globe particularly in manufacturing sectors. In this context of shifting wealth, it is increasingly important to foster competitiveness and connectivity.

Improving logistics performance is particularly important as it directly impacts growth, productivity, and trade within the region and beyond. The region’s productive structure with significant concentration in natural resource and agriculture augment the importance of logistics in fostering competitiveness. Nevertheless, logistics performance in the region faces serious gaps particularly in the areas of customs performance and the availability of infrastructure. Improving these aspects will entail more and better investment in infrastructure, as well as making the most of existing infrastructure by putting in place efficient trade facilitation measures and efficient and appropriate regulatory frameworks.

Coverage is provided for Argentina, Brazil, Bolivia, Chile, Columbia, Cuba, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatamala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, and Venezuela.

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Executive summary

OECD Development Centre

Clouds gather on economic horizon: After a decade of relatively strong growth, Latin America’s economic prospects are becoming more convoluted in response to three main factors: declining trade, moderation of commodity prices and increasing uncertainty surrounding external monetary and financing conditions. This is a consequence of the euro area’s weak performance, the slowdown in China’s economy and uncertainty over U.S. monetary policy. Rising domestic demand could make up for some of the weakening in external demand, but as many Latin American economies are now converging towards their potential GDP from an expansionary period, domestic demand stimulus could increase imbalances. Thus, previous experiences in the region signal the need to carefully monitor the expansion of credit and ensure the sustainability of government spending.

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