This post is a summary of four reports. The data about the GDP growth of 2013 was published at http://www.quandl.com/economics/real-gdp-growth-by-country. The GDP growth of 2011 and 2012 was published at http://www.worldbank.org/. The first article with the title of, "Latin America and Caribbean overview." It was published http://www.worldbank.org/en/region/lac/overview. The second report with the title of, "Report on the Latin America Economy: First Half of 2014." It was published in April http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/InformesBoletinesRevistas/BoletinEconomico/14/Abr/Files/art2e.pdf
As economic conditions in advanced economies improve in 2014 and beyond, the economic outlook is fairly upbeat for Latin America. With growth strengthening steadily from 2.9% in 2014 and 3.2% in 2015, the region`s expected average growth is up from last year`s modest 2.5%. On the other hand, the continued decline in commodity prices threatens to reduce export revenues in 2014. Food and metal prices have declined by 14% and 47%, respectively, since their 2011 peaks. What is more, capital flows to the region are projected to decline by 3.7% in 2014 as a result of the U.S. tapering its quantitative easing program. This is likely to impact domestic demand and ease GDP growth. Brazil and Mexico are projected to grow 2.4% and 3.4% respectively. Mexico`s reform agenda has fueled investor optimism, whereas Brazil would be in the same position as last year. The forecasted top growth performers for 2014 include Panama 7.3% and Peru 5.5%. Elsewhere in the region, rates are expected to remain robust with many countries likely to grow between 3% - 5% in 2014.
Against this background of weaker commodities prices, and with the output gap having closed in some of the region`s main economies, the second half of 2013 saw a slowdown in activity in Latin America. In 2012, only Argentina and Brazil showed lower growth rates, influenced by domestic factors, in 2013, the slowdown has progressively passed through to other countries, such as Venezuela, Mexico. In any event, Chile, Colombia and Peru, has maintained growth far above the average. The Brazilian economy, for its part, appears to have settled into a low growth rate which, viewed positively, may contribute partially to correcting its external imbalances. Some countries retain the capacity to pursue countercyclical policies, such as, Peru, Colombia, Chile, which in the absence of inflationary pressures, have been able to keep their policies accomodative and to assume the depreciation of their currency. In brazil, however, this leeway seems more limited at present owing to persistent inflation. During the years of expansion, Brazil has barely progressed in introducing the structural reforms needed to raise productivity, such as developing infrastructure or simplifying its tax system and bureaucracy, it has constrained its investment ratio, which has remained among the lowest in the region (18% of GDP). When in 2011 activity cooled and certain imbalances widened, structural rigidities surfaced, prompting a revision of growth expectations. The IMF, in this latest analysis lowered its potential growth to 3.5%. The external deficit is perceived by investors as another source of vulnerability. The current account balance of Brazil has deteriorated since 2008 to a deficit of -3.6% of GDP in 2013. But it also reflects Brazil`s loss of competitiveness. In any event, the Brazilian economy has significant strengths which mitigate many of the risks mentioned. The economic policy framework is a strenght despite its recent deterioration, with a central bank whose objective is inflation control, a flexible exchange rate and adherence to a law of fiscal responsibility. Also, government debt now has a more sustainable structure, with only a small proportion denominated in foreign currency. Nevertheless, the constraints on growth are palpable and will make it difficult for the economy to grow sustainable and robustly in the coming years unless new structural reforms are introduced.
In the first column, on the left, the GDP growth of 2013 in Latin America countries, from highest to lowest. In the column of the middle, the GDP growth of 2013 in some countries of the world. In the third column, on the right, the average GDP growth of 2011-2012-2013 in Latin America countries. The column is from highest to lowest. In this list, we can see that Brazil has on average, the lowest GDP growth in the last three years among all countries of Latin America.
Paraguay 13.0% Mongolia 11.8% Panama 9.8%
Panama 8.0% Laos 8.1% Peru 6.0%
Bolivia 6.8% China 7.7% Bolivia 5.7%
Peru 5.1% Mozambique 7.2% Ecuador 5.7%
Guyana 4.8% Philippines 7.2% Paraguay 5.3%
Suriname 4.6% Kazakhstan 6.0% Chile 5.2%
Colombia 4.3% Indonesia 5.8% Argentina 5.0%
Ecuador 4.2% Malaysia 4.7% Colombia 5.0%
Chile 4.2% India 4.5% Guyana 5.0%
Nicaragua 4.2% Turkey 4.3% Nicaragua 4.9%
Argentina 4.2% U.S.A 1.9% Uruguay 4.8%
Uruguay 4.2% U.K. 1.8% Costa Rica 4.3%
Guatemala 3.7% Japan 1.6% Suriname 4.3%
Costa Rica 3.5% Russia 1.3% Guatemala 3.6%
Brazil 2.3% Germany 0.6% Venezuela 3.6%
Mexico 1.1% France 0.3% Mexico 2.9%
Venezuela 1.0% Italy -1.8% Brazil 1.9%
