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Latin America, Caribbean 2014 Growth Likely Reached Only 1.1%

Latin America, Caribbean 2014 Growth Likely Reached Only 1.1%

Posted by Shanelle Weir on December 03, 2014

Growth in Latin America and the Caribbean likely reached only 1.1% this year, the slowest rate of expansion since 2009, but will jump back up to twice as high next year, the United Nations Economic Commission for Latin America and the Caribbean said.

The organization, known as Eclac, said Tuesday that Central America, including the Spanish-speaking Caribbean and Haiti, will post the best expansion in gross domestic product in the region next year, rising by 4.1%. The English-speaking Caribbean will lag with an expansion of 2.2%. South America will expand 1.8% next year, it added. Overall the area will expand 2.2% in 2015, it said.

A slump in demand in developed economies and the slowing of growth in emerging economies, especially China, hit Latin America and the Caribbean nations hard this year. China has become an important trading partner, especially for raw materials, for many countries in the region.

The agency said an economic deceleration became more apparent in the second quarter of this year, on weakness in private consumption. It points to a slight pickup in the last two quarters of 2014. Investments likely contracted by almost 3.0% in the region this year, it said.

Eclac Executive Secretary Alicia Barcena said at a news conference that the nations in the region need to boost domestic demand by giving priority to investments.

“Weak growth in the developed countries and modest expansion in the emerging economies, together with the post-crisis dynamics of world trade, suggest that boosting the region’s external demand will be a slow and difficult process, which will limit the contribution of exports to growth,” the Chile-based organization said.

Among the stars in terms of growth for next year, the Eclac forecasts that Panama will expand 7.0%, Bolivia by 5.5%, and the Dominican Republic, Peru and Nicaragua by 5.0%. Heavyweight Brazil is seen expanding by 1.3%, while Mexico is forecast to expand by 3.2% next year.

Venezuela is seen contracting 1.0% in 2015 after contracting 3.0% this year, the agency said.

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