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Preliminary Overview of the Economies of Latin America and the Caribbean 2013

image of Preliminary Overview of the Economies of Latin America and the Caribbean 2013
This publication highlights a regional slowdown in GDP growth. It argues that the currency depreciation seen in several countries in the region could, if sustained, increase incentives for investment in tradable sectors other than the region’s traditional exports (commodities), while redirecting expenditure to ease pressure on the current account. Growth-supporting industrial, trade, environmental, social and labour policies that take into account the needs of small and medium-sized enterprises, could help lessen the region’s structural heterogeneity. Growth combined with greater equality would thus gain economic and social sustainability, with greater reliance from investment and exports than before. It is argued that this combination would be aided by social covenants for investment.

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Outlook

Recent developments in the United States, Japanese and European economies, combined with a performance from the Chinese economy than was slightly better than expected, support a moderately optimistic outlook for global growth in 2014. Forecasts place the global economy's growth rate at 2.9%, with growth picking up in both developed and developing countries. GDP growth in Latin America and the Caribbean is expected to rally somewhat and the region could post a rate of around 3.2%, on the assumption of improving external conditions driving export growth. An upturn in the regional growth rate will depend, in part, on continued recovery in Mexico and better growth performance in Brazil, both of whose growth rates lagged the regional average in 2013.

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