The Economic Commission for Latin America and the Caribbean has revised upwards Peru’s GDP growth projection for this year to 3.9% from 3.8% forecast in April, which puts it as one of the fastest-growing economies in the region.
The United Nations regional organization presented its Economic Survey of Latin America and the Caribbean 2016, in which Peru is ranked as the second fastest-growing economy in South America.
According to ECLAC’s latest projections, the regional growth is led by Bolivia (4.5%).
In addition, it forecasts a 2.8% GDP growth for Paraguay, followed by Colombia (2.7%), Chile (1.6%) and Uruguay (0.5%).
The countries that will show a contraction in their growth rate are Argentina (-1.5%), Ecuador (-2.5%), Brazil (-3.5%) and Venezuela (-8.0%).
On the other hand, the Latin American growth will be led by the Dominican Republic (6.0%), Panama (5.9%), Nicaragua and Bolivia (4.5%), and Costa Rica (4.3%).
Latin America and the Caribbean
Latin American and Caribbean countries will show a -0.8% contraction in their growth rate in 2016, marking a steeper decline than in 2015 (-0.5%) and with very heterogeneous behavior among countries and subregions.
The multi-lateral body stressed the urgent need to mobilize investment—both public and private—to promote the region’s economic recovery and meet the challenges imposed by the 2030 Agenda for Sustainable Development.
“The capacity of countries to accelerate economic growth depends on the spaces for adopting policies that support investment. These policies should be accompanied by efforts to change the conversation between the public sector and private companies,” said Alicia Barcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC).
She continued: “Increasing productivity is also a key challenge for moving forward along a path of dynamic and stable growth.”
The survey indicates that in the external arena, the global economy will maintain low levels of growth, which will be accompanied by a slow expansion in trade, which has not managed to recover the levels seen before the international financial crisis.
On top of this, the report points to deteriorated prices for the region’s commodities exports and greater international financial uncertainty and volatility, which have increased since the United Kingdom voted to leave the European Union (the so-called Brexit). This decision has also produced greater risks to the world’s future growth.
“Faced with an economic contraction, the region needs progressive structural change with a big environmental push that promotes development based on equality and sustainability, as we have proposed in our institutional document Horizons 2030: Equality at the Centre of Sustainable Development, which we presented in Mexico last May,” Barcena said.
South America
In the regional sphere, the report forecasts a -2.1% contraction for South America in 2016, mainly due to a deterioration in its terms of trade, weaker external demand and a significant deceleration in domestic demand, which reflects a sizeable fall in domestic investment.
(END) CNA/JJN/RMB/MVB
Published: 7/26/2016