OECD forecasts return to growth for Latin America
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The Organisation for Economic Cooperation and Development (OECD) expects Latin America to return to 1.6% economic growth next year, surpassing growth in other regions.
The OECD forecasts that the region’s GDP per head will fall by 3.6% in 2009, compared with 4.1% in other OECD countries.
“Several countries in the region are expected to fare better than the OECD average”
“Even though these numbers at once put paid to over-optimistic talk of Latin America’s decoupling, they are encouraging about the longer-term,” the organisation says in its Latin American Economic Outlook 2010. “Not only is growth expected to resume as soon as 2010, but also several countries in the region are expected to fare better than the OECD average.” (article continues below)
Panama, for example, is expected to grow by 2.2% this year. Peru and Uruguay are also likely to show above-average growth of 0.9% and 0.2% respectively. “These figures give some support to the view of many economists that Latin America faces the current crisis with a newly gained resilience,” the OECD says.
Angel Gurría, the OECD secretary general, says 2010 will be a “critical year for Latin American economies”. Although there are signs of recovery, uncertainties remain.
Commodity prices, for example, remain volatile. Investment capital inflows and remittances from migrants are slowing down. “Most Latin American countries still need to address long-term competitiveness issues if they are to achieve a sustainable increase in living standards,” Gurría says. “This means pursuing structural reforms, boosting innovation and avoiding protectionism.”
