Latin America is estimated to end 2014 with a GDP growth rate of 1.1% , the lowest in the last five years, according to the 2 December 2014 report of ECLAC (Economic Commission for Latin America and Caribbean) of United Nations. The growth rate of the region has come down from 6.2% in 2010 to 2.8% in 2013. The reasons for the decline in growth in 2014 includes reduction in global demand and prices of commodities exported by Latin America and the slow down in domestic consumer demand and credit.
The good news is that the growth rate of Latin America is expected to increase to 2.2% in 2015.
Brazil, the largest economy of the region is projected to grow by 0.2% in 2014 and 1.3% in 2015; Mexico's growth expected to be 2.1% in 2014 and 3.2% in 2015; Argentina is likely to face economic contraction of 0.2% in 2014 but recover growth of 1 % in 2015. Colombia the fourth largest market will have growth of 4.8% in 2014 and 4.3% in 2015. Unsurprisingly, Venezuela will have negative growth of 3% in 2014 and 1% in 2015.
Panama and Dominican Republic top the region for growth in 2014 with 6%. They are followed by Bolivia- 5.2%, Colombia-4.8% and Nicaragua- 4.5%.
Panama is also on the top for 2015 with growth of 7% followed by Bolivia-5.5%, Peru, Dominican Republic and Nicaragua at 5%.
Some other highlights of the report:
- Urban open unemployment rate in 2014 stood at a historic low of 6%. It has decreased steadily from 7.4% in 2011.
- The current account deficit of LAC region declined to 2.3% in 2014 from 2.6% in 2013. The region had posted fiscal surplus of 1.4% in 2006 and 0.2% in 2007. Since 2008, the balance has remained negative.
- Average inflation of LAC region increased to 9.4% in October 2014 from 7.6% in December 2013 and from 5.2% in January 2010.
- The external debt of Latin America has come down from 40% of GDP in 2005 to 30% in 2014
- Gross international reserves have steadily increased from 170 billion dollars in 2000 to 860 billion in 2014.
- The currencies of the region have depreciated slightly in 2014 except in the cases of Argentina and Venezuela