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UPDATE 2-Global demand to boost Latam economic growth in 2014 -UN
December 11, 2013 / 3:06 PM / 4 years ago

UPDATE 2-Global demand to boost Latam economic growth in 2014 -UN

* Region’s GDP seen growing 3.2 pct next year- UN’s ECLAC

* 2014 growth seen picking up vs 2013 levels

By Anthony Esposito

SANTIAGO, Dec 11 (Reuters) - Growth in the economies of Latin America and the Caribbean is expected to gather pace next year, as a more favorable global outlook boosts demand for the region’s exports, the United Nations economic body for Latin America said.

The region is expected to grow by 3.2 percent in 2014, a step up from the forecast for this year of 2.6 percent growth, the Santiago-based Economic Commission for Latin America and the Caribbean said in a report on Wednesday.

Consumer spending will also continue to spur Latin American economies, though at a softer rate than in the past. ECLAC said the global economic situation heralded some opportunities for the region in 2014.

“Opportunities include increased international trade and the possibility of harnessing currency depreciations to ensure sustained changes in relative prices,” Executive Secretary Alicia Barcena said in a statement.

But a volatile global economy, more expensive external financing and a deterioration of current accounts are latent risks, ECLAC warned.

The U.S. Federal Reserve’s potential tapering of monthly bond purchases presents Latin America with a challenge and an opportunity, according to the body.

A reduction in the bond purchases could heighten global volatility and borrowing costs for the region, though weaker currencies could benefit key exports, which include oil, metals and grains.

This year’s growth estimate was downwardly revised from July’s estimate for 3.0 percent due to lower-than-expected external demand, international financial volatility and a slowdown in consumption.

Still, the emerging region’s growth is set to top the world average. The World Bank in June forecast the world’s GDP will grow 2.2 percent this year.


Brazil and Mexico, Latin America’s two biggest economies, which lagged the regional average in 2013, are seen picking up next year.

Regional powerhouse Brazil is seen clocking 2.6 percent economic growth in 2014, a small lift from this year’s estimated 2.4 percent expansion.

The U.N. body said “favorable effects” of some policies implemented this year, including lower inflation and greater infrastructure and energy investment, would benefit the Brazilian economy in 2014.

Latin America’s second largest economy, Mexico, is forecast to notch 3.5 percent economic growth next year, well up from a forecast of 1.3 percent in 2013, as demand rises.

By contrast, Argentina’s economic growth is seen easing to 2.6 percent from this year’s estimated 4.5 percent.

ECLAC said the grains-dependent country is facing a more fragile external scenario, a larger current account deficit and limited access to credit.

Economic expansion is expected to moderately gather steam in Andean investor darlings Colombia and Peru, though growth is seen easing slightly in Chile.

For a breakdown of the ECLAC’s growth forecasts, see:

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