International body predicts stronger growth for Caribbean economies

– Guyana’s GDP pegged at 4.5 per cent for 2013

Latin America and the Caribbean will see stronger economic growth, despite ongoing uncertainties at the international level (particularly the difficulties faced by Europe, the United States and China), according to new estimates released on Tuesday in Santiago, Chile, by the Economic Commission for Latin America and the Caribbean (ECLAC).
ECLAC also projected a 4.5 per cent GDP for Guyana in 2013, while indicating that the country’s GDP was 3.8 per cent for this year.
According to the Preliminary Overview of the Economies of Latin America and the Caribbean 2012, launched at a press conference by the executive secretary of the United Nations body, Alicia Bárcena, next year the region will grow by around 3.8 per cent, thanks mainly to the recovery of the economies of Argentina and Brazil, as well as ongoing buoyant internal demand in several countries.
The region will end 2012 with GDP growth of 3.1 per cent, which is higher than the expected figures for world growth (2.2 per cent), but lower than the 4.3 per cent posted in 2011. This shows that the world economic crisis had a negative but not dramatic impact on the continent, as the region maintained a certain resilience to external shocks throughout the year.
Despite the above, the ECLAC document states that Latin American and Caribbean economies remain largely dependent on world economic trends in 2013. The most likely scenario is that slow growth (and even recession in some cases) will continue in Europe during 2013, although this might also give rise to agreements that could gradually lead to a resolution of the financial, fiscal and competition imbalances that are currently in place.
In the United States, the probability of fiscal agreement increased following the recent presidential elections. China could post higher growth rates this year or maintain current levels, depending on the extent to which it manages to boost internal demand and keep inflationary pressure under control, at the same time as recovering export growth.
It is hoped that oil will not become an additional cause of instability for geopolitical reasons. Continuously buoyant internal demand in many of the region’s economies will result from improved labour indicators, increased bank credit to the private sector and rising commodity prices that will not fall significantly despite high external uncertainty.

Overview of 2012
In 2012, recession in Europe (resulting from financial, fiscal and competitiveness imbalances) combined with the slowdown in China and modest growth in the United States to produce a significant deterioration in the world economy.
Growth rates of world trade and output fell, capital inflows to developing countries shrank and volatility increased. The main impact of the deterioration on Latin America and the Caribbean was in the trade sphere, as growth in the region’s export values fell sharply from 22.3 per cent in 2011 to an estimated 1.6 per cent in 2012.
The regional performance was affected by slower growth in two of the region’s largest economies: Argentina (2.2 per cent in 2012, compared with 8.9 per cent in 2011) and Brazil (1.2 per cent compared with 2.7 per cent in 2011) – as these account for about 41.5 per cent of regional GDP.
In 2013, both countries are expected to post a recovery (3.9 per cent in Argentina and 4.0 per cent in Brazil). According to ECLAC’s Preliminary Overview, Panama will remain the region’s fastest growing economy in 2012 (an estimated 10.5 per cent), followed by Peru (6.2 per cent), Chile (5.5 per cent) and the Bolivarian Republic of Venezuela (5.3 per cent). Paraguay, Saint Kitts and Nevis and Jamaica will contract (by – 1.8 per cent, – 0.8 per cent and – 0.2 per cent, respectively), while Mexico will grow by 3.8 per cent. Central America as a whole will grow by 4.2 per cent, South America by 2.7 per cent and the Caribbean by 1.1 per cent.