The Economic Commission for Latin America and the Caribbean (ECLAC) has revised its projections for regional growth downwards while also projecting low growth for 2020.
Average growth for Latin America and the Caribbean will be 0.1 per cent and next year should see a 1.4 per cent expansion in Gross Domestic Product (GDP), ECLAC said.
Those figures put the region at seven consecutive years of low growth, which has resulted in worsening average per capita income. “The regions GDP per capita is seen shrinking by four per cent between 2014 and 2019, which implies an average annual decline of minus 0.8 per cent,” ECLAC said in a release Monday.
“The volume of global trade and the level of activity have been sharply decelerating, affecting demand for Latin America and Caribbean exports.”– The Economic Commission for Latin America and the Caribbean
“Latin America and the Caribbean’s economic dynamics in 2019 occur in a context in which the global economy is contributing less to the region’s growth, a situation that will very likely continue next year,” said the United Nations’ regional commission.
What’s more, the slowing growth affects 17 of 20 countries in Latin America; related, South American economies contracted by minus 0.2 per cent, marking its first decline in three years. However, the region is expected to expand by 1.3 per cent in 2020.
Meanwhile, improved growth of 1.6 per cent next year, when compared to 0.7 per cent in 2019, will still mean Central America and Mexico is affected by a decelerating growth rate when compared to that experienced since 2014.
“The volume of global trade and the level of activity have been sharply decelerating, affecting demand for Latin America and Caribbean exports,” ECLAC said adding that “there has also been a drop in prices for the raw materials that may of the region’s countries export.”
Additionally, financial conditions and finance flows available to countries have been negatively impacted by increased financial volatility, said the commission.
That said, given the global economy’s weaknesses, the importance of domestic demand will play a greater role in the region’s future growth.