By Isaac Cohen*
Most international economic agencies recently released downward revisions to the economic growth forecasts in Latin America, for this and next year. The region’s performance has been hurt by the fall in commodity prices caused by the slowdown in most advanced economies and in China.
The International Monetary Fund now projects economic growth for the region as a whole in 2014 at 1.3 percent, “the second lowest growth rate in 12 years.” This is more than one percent below the previous projection of April 2014. A slight recovery is projected by the Fund in 2015 for the region, at 2.2 percent.
The same downward revision was presented in the end of year overview by the Economic Commission of the United Nations for Latin America and the Caribbean. For 2014, the Commission projects a rate of growth of 1.1 percent and a slight recovery in 2015 of 2.2 percent.
Individually, the largest South American economies, such as Argentina and Brazil, experienced the sharpest contractions. However, this time the slowdown also includes stellar performers, such as Chile and Peru and now Colombia, because of the steep fall in oil prices. These last also deepened the negative performance of the Venezuelan economy, besieged by high inflation and a severe contraction.
The exceptions to the slow regional performance are the Central American economies and Mexico, expected to grow above the regional average, due to their proximity to the vigorously expanding US economy.
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.