Photo: Latin American Economy Expected to Slow in 2012
Economic growth in Latin America and the Caribbean will slow down next year due to the sluggish performance of the world economy and uncertainty and volatility of financial markets, warns a United Nations report released this week.
The report estimates that growth in the region will drop to 3.7 per cent in 2012, compared to 4.3 per cent this year.
Although growth had already slowed down from 5.9 per cent in 2010, the report states that most of the region showed “a positive performance thanks to a favorable external situation.” However, an increase in volatility and uncertainty during the second half of the year significantly complicated the global economic environment.
In particular, the report, which was produced by the UN Economic Commission for Latin America and the Caribbean (ECLAC), points to the current state of the Euro as a key factor that could contribute to economic uncertainty in the region.
The region’s high level of reserves and low levels of public debt – except for a few Caribbean countries – are strengths that would enable it to better face the economic downturn next year, says the report.
Growth also varies within the region with South American countries showing the most growth this year at 4.6 per cent, followed by Central America with 4.1 per cent. However, the Caribbean nations grew only 0.7 per cent.