PORT OF SPAIN, Trinidad, CMC – Most of the countries in Latin America and the Caribbean (LAC) are experiencing a “robust recovery” from the global financial crisis that shrank their gross domestic product (GDP) by nearly two per cent in 2009, according to a report released by the Economic Commission for Latin America and the Caribbean (ECLAC).
It said the countries were consolidating the economic gain and “paving the way for regional GDP to expand by 5.2 per cent.
“This makes Latin America and the Caribbean, together with the emerging economies of Asia, one of the most dynamic regions in the world,” ECLAC said in its “Economic Survey for Latin America and the Caribbean 2009-2010”.
The report noted that both internal and external factors were underpinning the positive performance and the most notable external factors include the continued buoyancy of certain key Asian economies, whose sustained demand for the region’s products has led to a significant recovery of both the prices and volumes of exports, especially commodities such as metals and minerals and petroleum.
“The albeit sluggish recovery of the United States economy, meanwhile, has improved the situation for Mexico and Central America and, in as much as it has boosted tourism demand, possibly for the Caribbean as well.
“For the same reasons, remittances sent by migrant Latin American and Caribbean workers from the United States are also expected to pick up slightly,” ECLAC said, noting however that “the growth figures for Europe, though positive, will be far lower, and the fiscal consolidation efforts now under way will keep them that way”.
The report notes that the internal factors contributing to the economic development of the LAC countries include the fiscal and monetary policy space that several countries had built up during the six previous years of booming commodity prices and sustained growth, which enabled them to deploy countercyclical measures during the crisis.
“Countries had also steadily reduced their external debt burdens, posted steady improvements in their fiscal accounts and increased their international reserves, which meant that at all times, except at the very peak of the crisis, they had access to resources on the international capital markets.”
ECLAC said the implementation of programmes to stimulate domestic demand against a backdrop of receding uncertainty, the return to relative normality on the financial markets and greater access to credit, combined with the gathering upturn in the international economy, created the conditions for economic activity to recover gradually over the course of the year.
But it warned that there are, certain and, in some instances, quite notable exceptions within this generally positive picture.
“A number of Central American and Caribbean countries, as net importers of food, fuel, metal and minerals, suffered rather than benefited from the upturn in commodity prices. For the same reason, they were unable to improve substantially their fiscal standing or their external debt position. This has made these countries highly vulnerable to fluctuations in the global economy.”
ECLAC said the favourable situation in which the region now finds itself, however, rests in part on transitory factors that are unlikely to recur in 2011, “and this needs to be taken into account.
“The region was able to respond dynamically to external demand and the countercyclical stimuli by taking advantage of preexisting idle capacity, but that possibility could be exhausted during the present recovery.
“At the same time, governments are facing a waning capacity to keep the current countercyclical measures in place and to introduce new stimuli without sacrificing the achievements of several years of effort in terms of maintaining macroeconomic equilibriums. In light of these considerations, growth estimates for 2011 are 3.8 per cent for the region as a whole.”
ECLAC said that once the recovery is well established in the LAC, the main challenges involved in the pursuit of steady growth will return.
“In other words, the conditions for greater growth in the future. Simultaneously, the region must continue boosting public finances to expand and improve social programmes, particularly those with a redistributive impact, so as to be able to achieve growth with greater equity,” ECLAC said.
LIES
One study says this , another says that. All these studies, that I consider to be so unreliable. lets just work to do whats best, anticipate the worst, and prepare always.