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Preliminary overview of the economies of Latin America and the Caribbean 2014

image of Preliminary overview of the economies of Latin America and the Caribbean 2014
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 tradeable 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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Domestic prices

Cumulative 12-month inflation in the Latin American and Caribbean region was 9.3% to October 2014, compared with 7.6% in December 2013. Inflation rose above the 2013 figure in most of the countries, but with significant differences between them. The regional figure is heavily influenced by the steady rise in official inflation reported by Argentina (a cumulative figure of 21.3% in the first ten months of the year), and the high rate of consumer inflation in the Bolivarian Republic of Venezuela, which reported a cumulative rate of 39% in the first eight months. In the latter case, the steady rise in consumer prices reflects shortages, as well as the impact of national currency depreciation on domestic prices and rapid growth of monetary aggregates. Argentina began to publish a new list of national urban consumer prices in 2014, to replace the consumer price index of the Greater Buenos Aires Province, and consumer inflation rates rose.

English

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