(Agencia CMA Latam) – Latin America and the Caribbean economies will jointly grow by 1.1% in 2017, after two consecutive years of contraction, according to the Economic Commission for Latin America and the Caribbean (ECLAC). The forecast is identical to a previous estimate released in April.
The growth should occur in spite of geopolitical risks, as the global economic background seems supportive, and because of an improvement in raw materials prices.
The report foresees that, in contrast to last year, all the countries in the region will experience positive growth rates in 2017, except for Venezuela, which should see its economy drop by 7.2%, and two countries in the Caribbean (Saint Lucia and Suriname).
ECLAC kept unchanged the growth forecast for South America’s 2017 Gross Domestic Product (GDP) at 0.6% and raised the growth forecast for Central America and Mexico from 2.3% to 2.5%.
In fiscal terms, the average deficit in Latin America will remain stable in 2017, at around -3.1% of GDP. Meanwhile, average inflation in the region’s economies has declined since the second half of 2016, despite the fact that three countries maintain rates above 20% per year.
On Argentina, ECLAC indicated that by 2017 it expects GDP growth of 2.0%, as a result of the sustained public investment momentum and the moderate expansion in private investment and exports.
Regarding Brazil, ECLAC said that the results of the Brazilian economy indicate that there are still hurdles before the return to a growth path. The economic challenges are still centered at the investment rebound and household consumption said the report.
On Chile, ECLAC expects that the deceleration scenario will remain in 2017, although at a slower pace than in 2016, and that GDP growth rate will be around 1.4%.
Meanwhile, economic activity in Colombia has shown strength and resilience in a context of adjustment in the face of slowing external demand, declining revenues due to the falling oil prices, and temporary shocks to domestic supply, the report said. The ECLAC forecast for Colombia’s GDP is 2.1% growth in 2017.
Regarding Mexico, ECLAC estimates that the country’s economy will grow 2.2%, but under pressure of higher interest rates and uncertainty in foreign investment and international trade due to possible protectionist measures by the United States.
On Peru, ECLAC projects that GDP will increase 2.5% in 2017, driven by the increase in mining production in a context of deceleration of both private and public…