THE United Nations Economic Commission for Latin America and the Caribbean (ECLAC) sees 2019 as a period of global uncertainties which could impact on the region’s economies.
This view was articulated by ECLAC executive secretary Alicia Barcena as she examined the Preliminary Overview of the Economies of Latin America and the Caribbean 2018, at a press conference in Santiago, Chile last Thursday.
Latin American and Caribbean economies are projected to record economic growth of 1.7 per cent, slightly below the 1.8 per cent figure which ECLAC released last October.
The report showed the greatest risk to the region’s economic performance in the run-up to 2019 continues to be an abrupt deterioration in the financial conditions for emerging economies. In 2018, emerging markets, including Latin America, showed a significant reduction in external financing flows, while at the same time sovereign risk levels increased and their currencies depreciated against the dollar.
The report also showed new episodes of deterioration in future financial conditions cannot be ruled out. The consequences for countries will depend on how exposed they are in terms of their external financing needs and profiles.
Barcena said, "Public policies are needed to strengthen sources of growth and cope with the scenario of uncertainty at a global level." She added, "The active role of fiscal policy in the region in terms of revenue and spending must be bolstered." Barcena also warned that public debt profiles must be taken care of in light of the uncertainty that could increase their cost and levels.
The report said Central America (excluding Mexico) will grow 3.3 per cent in 2019, South America 1.4 per cent and the Caribbean 2.1 per cent. Dominica led regional growth with a nine per cent expansion, followed by the Dominican Republic (5.7 per cent), Panama (5.6 per cent), Antigua and Barbuda (4.7 per cent) and Guyana (4.6 per cent).
Venezuela is forecast to suffer a minus ten per cent contraction in its economy in 2019. Nicaragua and Argentina are also expected to suffer minus two and minus 1.8 per cent respectively next year. Brazil and Mexico are projected to record economic growth of 2.0 and 2.1 per cent respectively in 2019.