The Economic Commission for Latin America and the Caribbean (ECLAC) has revised downward its projected economic growth for the Caribbean and Latin America.
The United Nations’ regional commission unveiled its report, Economic Survey of Latin America and the Caribbean 2014, in which it moved the regional growth forecast to 2.2 percent, down from the 2.7 per cent issued in April.
It said growth was affected by weakness in external demand, less dynamic domestic demands, insufficient investment and limited room for implementing policies to spur an upturn.
“These elements have a different impact on Latin American and Caribbean countries and sub-regions, confirming a high degree of heterogeneity in growth dynamics,” ECLAC added.
The study indicated that on a regional level, 2014 growth would be led by Panama with an increase in its GDP of 6.7 per cent. That country will be followed by Bolivia with 5.5 per cent, and Columbia, Dominican Republic, Ecuador and Nicaragua, with expansions of 5 per cent, based on the projections.
The Caribbean is estimated to grow 2 per cent, a recovery from the 1.2 per cent registered last year.
The study indicated that the economic slowdown observed in the last quarter of 2013 persisted during the first months of 2014, which means that the region will grow less than it did last year. Nevertheless, the report signalled that a gradual improvement in some of the world’s major economies should enable the trend to change towards the end of this year.
According to the ECLAC analysis, the resumption of economic growth in the United States will benefit Mexico and Central American countries, while recovery of the United Kingdom and several economies in the euro zone will have a positive impact, especially in the Caribbean, due to the arrival of more tourists.
The survey stressed that in light of the new scenario macroeconomic polices to manage the economic cycle and those oriented towards fostering more long-term growth must be closely coordinated.
“For that to happen, it is necessary to foster greater [public and private] investment in infrastructure and innovation and to boost the diversification of production,” the report said.