LatAm growth will fall to 3.2% in 2012, UN's ECLAC
The weak global economy, mainly due to the difficulties faced by Europe, United States and China, has affected growth in Latin America and the Caribbean. In 2012, the region's growth will be slower than in previous years, according to estimates presented today by ECLAC.
In the Economic Survey of Latin America and the Caribbean 2012, launched in Santiago, Chile, the United Nations agency states that slowdown experienced by economies in 2011 carried over into the first half of 2012, and this has brought down the growth projection for the entire year from the 3.7% announced in June to 3.2%.
Despite the slowdown, most countries have the capacity to respond to international adversity, according to the survey.
According to the document, private consumption has been the main driver of regional growth, thanks to the growth in labour markets, increased credit and - in some cases - remittances. However, the dramatic slowdown in external demand and the downward trend in the prices of most export commodities have made foreign trade the main way in which international crises have been passed on to the region's economies.
The findings of the Economic Survey 2012 indicate that the majority of South American and Central American countries (plus Mexico) will have GDP growth rates in 2012 that are similar or slightly lower than those in 2011, because of the increase in consumption and, to a lesser extent, the growth in investment. Argentina and Brazil, however, which account for a considerable proportion of the region's weighted GDP, will have slower growth than the rest (2.0% and 1.6%, respectively). This explains most of the reduction in the region's growth in 2012 compared with 2011 (when it was 4.3%).
Brazil experienced a stronger slowdown than other countries in the second half of 2011, and it was only in the beginning of the second half of 2012 that some signs of recovery began to appear. In Argentina, the fall was most striking during the first six months of 2012.
Following the slowdown in 2012, ECLAC predicts a recovery for Argentina and Brazil in 2013, and this would account for most of the average growth increase in the region for that year (expected to stand at 4.0%).