The global slowdown will only touch Latin America: the However, the region's GDP will increase by 3,7%, exports will grow by 6,3% and strong domestic demand will push imports up by 10,2%. This is the picture for 2012 that the Economic Commission for Latin America and the Caribbean (CELAC) paints for the Central and South American continent.
'SECLAC expects a 3,7% increase in the region's GDP for the whole year, slightly down on the +4,3% in 2011. Countries more virtuous of 2012 will be Panama (+8,0%) and Haiti (+6.0%), followed by Peru (+5,7%), Bolivia (+5,2%) and Costa Rica (+5,0%). Venezuela will also experience remarkable growth (+5%) while Chile's economy will expand by 4,9%, Mexico by 4%, Argentina by 3,5% and Brazil by 2,7%.
As it regards instead the first three months of 2012, growth was slower year-over-year in Argentina, Colombia and Guatemala, but only Paraguay recorded negative growth. While it was a much better time than the last few months of 2011 especially for Peru, Chile and Venezuela, Mexico and Brazil. In April 2012, euro area inflation remained stable at 5,5% against 6,7% in March and 7% in December 2011.
The most important news is that the growth of the first months of 2012 is associated with an increase in domestic demand. Services, and especially the business, the fastest growing sectors were confirmed. private consumption they are responsible for much of the increase in GDP in the region thanks to rising employment and wages and the expansion of credit and, for some countries, remittances from the United States.
The European debt crisis, the Chinese slowdown and weak growth in the United States will have different effects on countries depending on the relative weight they operate in their export destination markets. As far as exports are concerned, the Falling commodity prices widened export value losses in the first three months of 2012 which increased by 10,4% against a record +29,3% recorded in the second quarter of 2011. Obviously part of the decline is attributable to the weakening of sales in Europe.
However, Cepal expects that the trade balance brings less satisfaction than in 2011: the exports will grow by 6,3% in the year, while growing domestic demand will push the imports at +10,2%, so that the trade surplus will fall from 1,3% of GDP in 2011 to 0,7% in 2013.
Finally the report does not exclude a worsening of the external scenario in 2012-2013. Should the situation worsen, financial capital inflows could be altered and foreign bank credit lines could be suspended, which would result in a fall in the price of shares and a depreciation of currencies, as well as a reduction in exports and investments.
Although in many countries this is less true than in 2008-2009, the region still has room to implement fiscal maneuvers and anti-cyclical policies that would be able to contain the effects of the global crisis. Indeed, the suggestion is precisely that of maintaining stability in fiscal policies, preferring a moderation of growth if necessary. Some countries, on the other hand, would need external aid to avoid the increase in unemployment and poverty.
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