Tuesday, June 14, 2016
With modest exceptions, GDP forecasts for Latin America and the Caribbean continue to decline for this year and next
- Obstacles to competitiveness (other than exchange rates) will not be overcome in a weak investment climate.
- Recent advances in reducing poverty and inequality could be undermined or reversed.
- Political crises in Venezuela and Brazil mar prospects for rapidly resolving economic ills.
- The increased importance of exports to and lending from China in recent years is now a substantial risk factor.
After a regional contraction of 0.7% last year, according to the World Bank, a new fall is likely this year. This is due to the slump in South America -- dragged down by Brazil and Venezuela in particular -- with Mexico, Central America and the Caribbean seeing better prospects if the US economy does not falter.
Despite widespread calls for reform, space for major change is limited. With growth expected to remain subdued for several years, fiscal retrenchment could see a worsening of employment and poverty rates. Meanwhile, prospects for greater investment in education, diversification and infrastructure are dim.
© Oxford Analytica 2020. All rights reserved. This content contains general information about geopolitical, macroeconomic and social developments or (where stated) other matters. It does not contain advice or recommendations that may be relied on. Where links to external websites are provided, this does not indicate that Oxford Analytica or Emerald Group agree with, endorse or have checked for accuracy the contents of said sites.