CEPAL expects growth of 1.6 percent this year, up from 0.7 percent in previous estimate
The United Nations Economic Commission for Latin America and the Caribbean (CEPAL) improved its projections for Argentina’s economy yesterday, revealing that it expects the country’s Gross Domestic Product to grow at 1.6 percent this year, almost a full point more than the 0.7 percent it predicted in its last estimate released in July.
The news was offset by the regional picture, which anticipated a contraction in Latin America and the Caribbean of 0.3 percent in light of Brazil and Venezuela, which are expected to contract by 2.8 percent and 6.7 percent, respectively. The positive news regarding Argentina’s expected growth represents the second time in recent months that CEPAL has revised projections for the country upward. In April, CEPAL said it expected the country to grow zero percent this year.
Consequently the report stressed a continuing improvement in the country’s performance this year, in sharp contrast to the recession underway in the behemoth economy of neighbouring Brazil.
“Despite the regional trend toward a deceleration, the region’s economies will show differentiated dynamics,” the CEPAL report said, its data highlighting that Argentina was a success story amid a more gloomy regional outlook.
The report also said that Argentina’s anticipated growth for 2016 was also expected to be of 1.6 percent.
This forecast, in turn, followed improved reports from the INDEC official statistics bureau, whose latest findings showed a growth of 2.3 percent in the second quarter of 2015 and 2.7 percent in the national economy for July compared to the same month in 2014.
Regional picture negative
The regional UN affiliate said that the slowing of emerging markets such as China would affect the regional economy badly, as primary commodity prices have been on the slump.
“Among the main factors behind the growth drop are a weak internal demand; a global environment marked by a low growth of the developed world; an important deceleration in emerging economies, especially China; the strengthening of the dollar and a growing volatility in financial markets; and an important fall in primary goods prices,” CEPAL said.
Consequently, it also revealed that those economies with closer ties to the United States and the improving US dollar were expected to fare better. This was reflected in the breakdown of more precise economies in the region.
The overall growth projections for Central America and Mexico, for example, was 2.6 percent for 2015 and 2.9 percent in 2016, according to CEPAL, while projections for South America alone predicted recession across both years, a 1.3-percent slump in 2015 and a 0.3-percent fall for 2016.
The under-performance of two economies in South America, including Brazil, consequently dragged the CEPAL projection for the entire Latin American economy into the red at a negative 0.7 percent growth rate for 2015.
This was, however, compensated by the majority of national economies across the region, including all Caribbean and Central American nations, which were all — with the exception of St. Lucia — predicted to grow from between one percent (Trinidad and Tobago) and 5.8 percent (Panama) for 2015.
Date: October 6, 2015