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A16 LOCAL
Friday 24 august 2018

Latin America and the Caribbean Holds to a Path of Moderate Growth

MEXICO ― In an interna- Latin America and the Ca- ment, overall average despite international turbu-
tional context marked by ribbean 2018 – one of the growth in the region – the lence. That is positive but it
uncertainty and volatil- organization’s most tradi- projection of which de- demands that we redouble
ity, the economies of Latin tional publications, issued clined by seven-tenths ver- our efforts to prompt a re-
America and the Carib- uninterruptedly since the sus the last estimate pro- activation, without resort-
bean will grow 1.5% on year of its founding (1948) vided by the organization ing to excessive fiscal ad-
average in 2018, thanks to – was released today dur- in April – maintains a posi- justments. Regional inte-
a rebound in domestic de- ing a press conference tive trend, despite show- gration can play an impor-
mand, private consump- at ECLAC’s Subregional ing signs of slowing. As on tant role here, and we must
tion especially, and a slight Headquarters in Mexico, in previous occasions, there aim in that direction,” said
increase in investment, Mexico City, by its Execu- is great heterogeneity the Executive Secretary of
ECLAC indicated in a new tive Secretary, Alicia Bárce- among the various coun- the Economic Commission
annual report. na. tries and subregions, since for Latin America and the
South America is expected Caribbean (ECLAC), Alicia
The Economic Survey of According to the docu- to grow 1.2% in 2018, while Bárcena.
Central America will notch In this edition, ECLAC’s re-
3.4% growth and the Carib- port dedicates the major-
bean 1.7%. With regard to ity of its chapters to a pro-
countries, the Dominican found analysis of the evolu-
Republic and Panama will tion of investment in Latin
lead the region’s growth, America and the Caribbe-
with increases in Gross Do- an between 1995 and 2017,
mestic Product (GDP) of with its stylized facts, main
5.4% and 5.2%, respective- determinants and policy
ly, followed by Paraguay challenges. It indicates that
(4.4%), Bolivia (4.3%), Anti- the region has increased its
gua and Barbuda (4.2%), investment levels in the last
and Chile and Honduras two decades, closing the
(both with 3.9%). existing gap with other re-
gions of the world. It warns,
The Economic Survey adds however, that additional
that this regional growth efforts are needed to pro-
is occurring in a complex mote the productive link-
global scenario, charac- ages of this investment and
terized by trade disputes thereby bolster economic
between the United States, growth.
China and other nations;
growing geopolitical risks; The Survey indicates that
a decline in capital flows between 1995 and 2017,
toward emerging markets gross fixed capital forma-
in the last few months and tion (fixed investment)
a rise in sovereign risk levels; rose from 18.5% to 20.2%
depreciations of local cur- as a proportion of the re-
rencies against the dollar; gion’s GDP, even though
and a global economic ex- starting in 2012 investment
pansion that is tending to momentum has tended to
lose momentum. decelerate. This behavior
reflects three economic
The report indicates that cycles in this period: from
Latin America’s tax collec- 1995 to 2002, 2003 to 2008,
tion will hold steady in 2018 and 2009 to 2017. The study
at around 17.8% of GDP adds that the construction
(versus the 17.9% recorded sector had the greatest
in 2017), while average in- participation in investment
flation will remain within in the time frame analyzed,
expected values (6.5% to with 67.5% of total invest-
June versus the 5.3% seen ment. Nonetheless, ma-
in 2017, excluding Ven- chinery and equipment
ezuela). Meanwhile, the appear as the most dy-
regional urban unemploy- namic component in that
ment rate has stopped period, since investment in
growing and is forecast at that area went from rep-
9.2%, just below the 9.3% resenting 4.7% of GDP in
seen last year, thanks to 1995-2003 to 8.1% in 2010-
greater creation of salaried 2016. “This is positive for
employment (1.4% in the the region, since it allows
first quarter of 2018, after for incorporating greater
totaling 0.3% in 2017). technological content and
“Our region continues to laying the foundations for
grow, although at a slower improving productivity and
pace than what was pro- sustaining growth,” the re-
jected several months ago, port indicates.q