Sluggish GDP growth prediction for LatAm, Caribbean in 2015
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E-mail Xinhua, July 30, 2015
Latin America and the Caribbean countries' economy will only grow by an average of 0.5 percent in 2015, according to new projections made by the Economic Commission for Latin America and the Caribbean (ECLAC).
The figures were released Wednesday at a press conference in Santiago, with South America's economy anticipated to contract by 0.4 percent, Central America and Mexico to grow by 2.8 percent, and the Caribbean up 1.7 percent, respectively.
In terms of individual countries, Panama will lead with a growth of around 6 percent in gross domestic product (GDP), followed by Antigua and Barbuda (5.4 percent), and the Dominican Republic and Nicaragua (both at 4.8 percent).
The ECLAC report stated that this lukewarm performance resulted from internal and external factors.
The sluggish external demand led to a fall in the price of basic products as well as higher volatility and uncertainty in international financial markets.
Internally, a drop in investment, coupled with a slowdown in consumption growth, has largely contributed to a reduction in internal demand.
"Kickstarting growth in both short and long term requires stimulating public and private investment in a complex environment," said Alicia Barcena, executive secretary of the ECLAC.
"This can be done through fiscal regulations that protect investments, by turning to public-private partnerships and by seeking new sources of financing, such as infrastructure and investment banks," Barcena added.
The economic study also revealed that the low growth will have a negative impact on the labor market. The ECLAC estimates that the unemployment rate in Latin America and the Caribbean will climb to an average of 6.5 percent, up from 6 percent last year.
The ECLAC also noted that the capacity to stimulate economic growth depends on each country's ability to implement right policies to attract investment, which is key to diminishing the impact of external economic shocks.
It also reminded countries that investment is related to individual productivity. So public policies are necessary to help productivity and serve as beacons for private investment.
To further improve private investment environment, the ECLAC encourages countries to offer financing for small and medium-sized enterprises, especially in the long term. Endi
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