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News > Latin America

Growth in Latin America and the Caribbean Drops to 0.5%: ECLAC

  • ECLAC Executive Secretary Alicia Barcena said that the region which has been plunged into uncertainty and the situation is “seriously worrying.”

    ECLAC Executive Secretary Alicia Barcena said that the region which has been plunged into uncertainty and the situation is “seriously worrying.” | Photo: EFE

Published 31 July 2019
Opinion

South America is expected to grow by 0.2 percent, Central America 2.9 percent and the Caribbean 2.1 percent.

The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) presented Wednesday its annual economic report for the region at a press conference in Santiago, Chile.

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In the 'Economic Survey of Latin America and the Caribbean 2019', the ECLAC stated that the economy of Latin America and the Caribbean is expected to grow 0.5 percent in 2019, lower than the 0.9 percent registered last year. 

ECLAC Executive Secretary Alicia Barcena said that the region which has been plunged into uncertainty for five years is not showing signs of improvement, adding that the situation is “seriously worrying.”

South America is expected to grow by 0.2 percent, Central America 2.9 percent and the Caribbean 2.1 percent, according to the study.

The unfavorable international scenario characterized by “greater volatility” and “financial fragility,” along with a rise in geopolitical tensions, was among the reasons submitted by the study to explain the slowdown.

Internally, the low growth is due to a lack of impulse in investments and exports as well as a decline in public spending and private consumption.

The slowdown is also resulting from deficits and the debt that increased in recent years that will impact 21 of the 33 countries in the region.

The economic slowdown in Latin America and the Caribbean will affect 21 of 33 countries in the region in 2019 : ECLAC report. Review the projections by country. 
 

South America has mainly been affected by the economic crisis in Argentina along with the weakening of its currency, the country’s economic situation is continuing to worsen as it will close the year with a receding of 1.8 percent.

The largest economy in the region, Brazil, does not look any better. Its economic growth will be just 0.8 percent this year, down from its previous forecast of 2.1 percent. The fall in investments, especially in the mining sector, and the crisis in neighboring Argentina are complicating the economic plan of far-right President Jair Bolsonaro's administration.

Policy space needs to be expanded to tackle the slowdown and contribute to economic growth, with measures in the fiscal and monetary areas as well as in investment and productivity, says the study.

In the fiscal area, for instance, the survey cites the need to reduce tax evasion and illicit financial flows, promote taxes related to the digital economy, environment, and public health; and realign tax expenditures toward productive investment.

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