Latin American economy will grow only 1.1% in 2014

Latin America will grow 1.1% in 2014, the lowest in five years, a drop in investment and low performance of its major economies, while for 2015 rose slightly to 2.2% is expected, reported this ECLAC Tuesday.

After the regional contraction of 1.3% recorded in 2009, the region achieved this year its weakest growth in five years, affected by the fall in economies like Argentina (-0.2%) and Venezuela (-3% ) and low growth in Brazil (0.2%), Mexico (2.1%) and Chile (1.8%), according to data from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). The annual figure compares unfavorably with the growth of 2.7% recorded average Latin American economies in 2013.

“The slowdown in the dynamism of the regional economy I became more apparent in the second quarter, simultaneously with contraction of investment in several economies in South America and a general slowdown in growth in consumption, especially private “explains ECLAC, a technical agency of the United Nations headquarters in Santiago.

The slowdown in investment observed since 2011 and in 2014 contracted by about 3.5%, is also “an important factor in the decline in the growth rate of GDP,” the ECLAC. “Stimulating economic growth and reverse the slowdown in the current context of the global economy involves broader challenges for the region,” said Alicia Barcena, Executive Secretary of ECLAC, at a press conference.

Among them, he said, “is required boost domestic demand dynamics favoring investment. This would impact positively on productivity and competitiveness of economies. ”

Slight Rise in 2015

In the third and fourth quarter has seen a slight improvement in the growth rate, which foresees a rise to 2015, when a regional expansion of 2.2% is expected.

“This moderate hike will occur in a context of slow and heterogeneous recovery of the global economy, with a dynamic to the falling prices of raw materials and sluggish external demand for the region and the increased financial uncertainty, “said ECLAC.

The countries that lead the regional expansion next year will be Panama, up 7% of GDP, Bolivia (5.5%) and Peru and Dominican Republic, 5%. Brazil, the largest economy in the region, reached in 2015 an expansion of 1.3%, while Argentina record a GDP growth of 1%. For Mexico’s growth estimate is 3.2% for Chile 3% and in the case of Colombia would reach 4.3%.

External Sector

During this year, the region was affected by stagnation of exports, which had so far been one of the engines of regional growth.

While countries like Mexico and Dominican Republic benefited from a recovery in the US economy, South America faced the sluggishness of Europe and China, major export destinations, plus a lower international commodity value.