South American Slowdown
By Isaac Cohen*
The world economic slowdown is now reflected in the regional economic performance of Latin America and the Caribbean, particularly in the economies of South America. The latest figures, released in Washington during the annual meetings of the International Monetary Fund and the World Bank, reveal a slowdown, deeper than anticipated, for this year and in 2015.
The April projection of the regional average rate of yearly economic growth was revised downward, by the International Monetary Fund, from 2.3 to 1.3 percent in 2014 and from almost 3 to 2.2 percent in 2015. As usual, the regional average irons out differences in the economic performance of individual economies. This time, the main contrast is between South America and the economies of the northern part of the Hemisphere, which benefit from closer relations with the slow recovering U S economy.
The downward revision includes the major South American economies, particularly Argentina, Brazil, Venezuela and even star performers, such as Chile and Peru. All of them benefitted greatly from the boom in commodity exports, mainly to China. Two remarkable exceptions in South America, during this year and next, are Bolivia with expected growth of over 5 percent and Colombia over 4 percent.
By contrast, Mexico is projected to grow 2.4 percent this year and 3.5 in 2015. While average growth in Central America, including Panama, is projected to be close to 4 percent in both this year and next.
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.