Latin America, and Mercosur in particular, leading the global economic recovery

by Craig Janis

Latin America, especially Mercosur, is leading the global economic recovery. The forecasted growth in GDP for Mercosur countries in 2011 is 7.5%, and for Latin America in general it’s 5.8%. From MercoPress:

“Things in Latinamerica have rolled much better than expected” in an international context which still faces some turbulences resulting from the prolonged slowdown which begun in late 2008, according to Joaquin Vial, BBVA chief economist for South America

Vial said that besides domestic demand, the booming international prices of commodities have attracted a massive inflow of capital and an overall appreciation of the region’s currencies.

Domestic demand stimuli was followed by a strong consumers and investors confidence reaction, together with a favourable evolution of employment, which helped to begin a gradual withdrawal of fiscal and credit incentives.

In this scenario the countries which currently have the best growth prospects are Paraguay, 10.1%; Uruguay, 8.8% and Peru, 8.5%. Argentina is poised to expand 8%; Brazil 7.5%; Panama, 6% while the only country that could end the twelve months with an economic contraction is Venezuela, probably 2.3%.