Eclac forecasts LAC will resume growth in 2017

Tuesday, October 18, 2016

After the economy contracted 0.5% in 2015 and a 0.9% drop is projected for 2016, the UN Economic Commission for Latin America and the Caribbean (Eclac) forecasts 1.5% GDP growth for the region in 2017.

South America is expected to grow 1.1% in 2017 compared to a contraction of 1.7% in 2015 and a projected drop of 2.2% this year, according to Eclac's October update.

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Brazil, the largest economy in the region, is expected to grow 0.5% next year after a decline of 3.8% in 2015 and a forecast 3.4% dip in 2016.

Venezuela is predicted to see its economic contraction slow to 4.0% in 2017 from the 8.0% plunge expected for this year.

The best performer in South America in 2017 is expected to be Bolivia (4.3%), followed by Peru (4.0%) and Paraguay (3.8%).

In Central America, the Dominican Republic is expected to spearhead regional growth with a 6.3% expansion in 2017, followed by Panama and Nicaragua with 5.7% and 4.5%, respectively.

The Caribbean region is expected to grow 1.4% next year compared to a contraction of 0.5% in 2015 and a further 0.3% in 2016.

For 2016 Eclac downgraded its projection for LAC slightly to a contraction of 0.9% from the 0.8% it predicted in July.

The projection for 2017, according to Eclac, considers a more auspicious global economy than that in 2015 and 2016, with higher commodity prices and greater growth in the main trading partners of the region.

In order to achieve the higher growth expected for 2017, investment in infrastructure and technology should play a central role by boosting investment and productivity, while protection of social progress achieved in recent years through maintained social investment and intelligent fiscal adjustments will also be required, the organization stated.