The Economic Commission for Latin America and the Caribbean (ECLAC) is confident that the rebound in Brazil’s economy will boost economic growth in Latin America in the coming years.
Brazil, which will host the World Economic Forum for Latin America tomorrow and for three days, expects growth of 2%, compared to 0.9% in 2017, while the global forecast for the entire region is set at 2 , 2% after scoring 1.3% in 2017.
These favorable projections, included in the Preliminary Overview of the Economies of Latin America and the Caribbean 2017 of the Economic Commission for Latin America and the Caribbean (ECLAC), join the forecasts of other countries that have been growing at moderate rates and that will have an acceleration of economic activity.
Thus, ECLAC expects Chile to move from 1.5% in 2017 to 2.8% in 2018%; Colombia, from 1.8% to 2.6%; and Peru, from 2.5% to 3.5%.
Mexico, the other major regional economy together with Brazil, will go from an increase in GDP of 2.2% in 2017 to 2.4% in 2018.
The highest rate of expansion in the region is expected to occur in Panama, with 5.5% after growing 5.3% in 2017; followed by the Dominican Republic, which will go from 4.9 to 5.1%, and Nicaragua, which will advance from 4.9 to 5%.
At the other end of the scale, Venezuela is expected to reduce its GDP drop to 5.5% in 2018, compared to the fall of 9.5% estimated for 2017.
Argentina will grow 2018 by 2.2%, according to ECLAC; Bolivia 4.0%; Ecuador 1.3%; Paraguay 4%; and Uruguay will increase its GDP by 3.2%.
Costa Rica 4.1%; Cuba 1%; El Salvador 2.5%; Guatemala 3.5%; Haiti 2.2%; and Honduras will grow 3.9%.
By subregions, South America is expected to grow 2% in 2018, while Central America plus Mexico would grow by 2.7%, and Central America alone by 3.6% and the Caribbean by 1.5%.
In line with the improvement in economic growth, it is expected that the unemployment rate will begin to decrease from 2018, after which between 2016 and 2017 urban unemployment increased from 8.9% to 9.4% due to an increase in the rate of participation and a stagnation in the employment rate.
By 2018, unemployment would fall to 9.2% due to the increase in employment due to higher aggregate demand, the report indicates.
On a monetary level, ECLAC expects to maintain a situation of improvement in liquidity and low international interest rates.
In the opinion of this UN agency, this poses a great opportunity for Latin America and the Caribbean to expand its economic policy space in order to sustain the expansionary cycle.
ECLAC identifies some challenges for the consolidation of global growth in the medium term, such as the reversal of the quantitative expansion policies that have been implemented, or announced, by the Federal Reserve of the United States, the European Central Bank and the Bank of Japan .
To this he adds the challenges derived from the greater protectionism that he observes in some countries or the rhetoric of the United States in the last rounds of negotiations of the North American Free Trade Agreement (NAFTA), which suggests that he withdrew from it as he has already done. Trans-Pacific Partnership Agreement (TPP).