Following a 1.9 percent decline in 2009, Latin America and the Caribbean will grow by 6 percent in 2010 thanks to the economic recovery posted by most countries in the region, according to an annual report launched by the Economic Commission for Latin America.
In the “Preliminary Overview of the Economies of Latin America and the Caribbean 2010,” presented by Alicia Bárcena, executive secretary of this U.N. regional agency, countercyclical measures adopted by several countries in the wake of the international financial crisis have been shown to have a positive impact on economic growth, which points to a 4.8 percent rise in per capita gross domestic product for this year.
The consolidation of the upturn also had a positive effect on regional employment, with the unemployment rate falling from 8.2 percent in 2009 to around 7.6 percent, while the quality of jobs created also improved.
Meanwhile, inflation edged up slightly from 4.7 percent in 2009 to an estimated 6.2 percent in 2010, mainly due to international prices for some commodities.
Although the growth of the region’s countries has been uneven, most recorded positive figures for 2010. South America will grow by 6.6 percent, while gross domestic product is expected to rise by 4.9 percent in Mexico and Central America and by 0.5 percent in English-speaking and Dutch-speaking Caribbean countries.
Paraguay will post the strongest growth (9.7 percent), followed by Uruguay (9 percent), Peru (8.6 percent) and Argentina (8.4 percent). Brazil will grow by 7.7 percent, while Mexico and Chile will expand by 5.3 percent.
In contrast, Haiti and the Bolivarian Republic of Venezuela are expected to see gross domestic product fall by 7 percent and 1.6 percent, respectively.
From the second half of 2010 onwards, many factors have generated a less optimistic scenario for the international economy, and this combines with weaker demand from public policies and the shrinking of idle productive capacity to give a lower growth forecast for the region of 4.2 percent in 2011 (approximately a 3 percent rise in per capita gross domestic product).
Externally, there remains major uncertainty about the robustness of the recovery in developed economies, especially those in Europe. In addition, emerging economies have gained in strength in relative terms, especially Latin American and Caribbean countries, thus increasing the flow of capital towards the region and causing currency appreciations there.