Latin America: Economic Outlook

by Dave

Latin Business Chronicle

In its latest World Economic Outlook released last week the IMF estimated that Latin America’s GDP would expand by 4.6 percent this year. That’s slightly better than the 4.4 percent the fund had predicted in its previous World Economic Outlook in April. However, for 2009 the fund revised down its forecast – from 3.6 percent to 3.2 percent, which is also a relative minor change.

Despite the slight revision next year, Latin America remains one of the leading growth areas in the world. The growth rate this year, for example, is significantly higher than the United States (1.6 percent), the Euro area (1.8 percent) and Japan (0.7 percent). Even next year’s rate of 3.2 percent will beat the IMF’s forecasts for the United States (0.1 percent), the Euro area (0.2 percent) and Japan (0.5 percent).

Brazil is set to grow by 5.2 percent this year and 3.5 next year, the fund says. Previously it had predicted growth of 4.8 percent and 3.7 percent. Mexico’s economy, the region’s second-largest, will expand by 2.1 percent this year and 1.8 percent next year, the IMF says.

PERU LEADS THE WAY

Peru, Latin America’s seventh-largest economy, will see the strongest growth this year – 9.2 percent. Next year, its economy should expand by another 7.0 percent, which will be the second-highest growth in the region. Panama, the 13th-largest economy, is expected to post the second-highest growth this year – 8.3 percent – and the highest next year – 7.8 percent, the fund says.

Apart from Peru and Panama, other growth winners this year include Argentina and Uruguay (6.5 percent each), Venezuela (6.0 percent), Bolivia (5.9 percent) and Paraguay (5.5 percent). Apart from Mexico, the growth laggards this year include Haiti (2.5 percent) and Ecuador, El Salvador and Nicaragua (3.0 percent each).

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