Contents of the Economic Survey 2012 I. Macroeconomic trends in Latin America and the Caribbean in 2012 II. Reactions of the countries of the region to the adversities of the global economy III. Savings and investment: stylized facts IV. The role of the regional financial architecture in confronting the adversities of the global economy V. Conclusions and recommendations
International economic context and regional impact The deceleration of China most strongly affects exporters of natural resources (South America), who have a greater capacity to react (fiscal space) The dynamism of the U.S. economy is benefitting to a greater degree Mexico, Central America and the Caribbean, but these have less capacity to react (fiscal space) when faced with a possible “fiscal cliff” The recession in Europe has had a varying impact: In South America, lower exports were registered (Brazil, Chile and Uruguay) as well as a drop in remittances (Ecuador, Colombia), although these countries do have a greater capacity to react to these adverse developments In Mexico and some Central American countries there was an increase in exports, despite the contraction of the European economy Most affected countries (South America) have a greater capacity to react, but there are risks to Central America and the Caribbean
The reduction in the forecast for regional production for 2012 is largely due to a lower level of activity in Brazil and Argentina LATIN AMERICA: CONTRIBUTION TO REGIONAL GDP GROWTH BY COUNTRY 7% 6% 5% 4% Brazil Argentina 3% The Caribbean 2% Mexico 1% Central America 0% Rest of South America Latin America & the Caribbean -1% -2% -3% 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source : Economic Commission for Latin America and the Caribbean (ECLAC), based on official figures.
Consumption continues to be the main driver of GDP growth LATIN AMERICA: RATE OF GDP VARIATION AND THE CONTRIBUTION TO GROWTH OF THE COMPONENTS OF AGGREGATE DEMAND (2005 constant dollars, in percentages, weighted averages) 10 10 8 8 6 6 4 4 2 2 0 0 -2 -2 -4 -4 -6 -6 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II 2004 2005 2006 2007 2008 2009 2010 2011 2012 Public Consumption Private Consumption Investment Net Exports GDP Source : Economic Commission for Latin America and the Caribbean (ECLAC), based on official figures.
Economic activity continues to expand (3.2%), but at a lower rate than that of 2011 LATIN AMERICA AND THE CARIBBEAN: GDP GROWTH RATE, 2012 (In percentages) Panama 9.5 Haiti 6.0 Peru 5.9 Venezuela (Bol. Rep. of) 5.0 Nicaragua 5.0 Costa Rica 5.0 Chile 5.0 Bolivia (Plur. St. of) 5.0 Dominican Republic 4.5 Equador 4.5 Colombia 4.5 Central America (9 countries) 4.4 Mexico 4.0 Uruguay 3.5 Guatemala 3.5 Latin America 3.2 Latin America & the Caribbean 3.2 Honduras 3.2 Cuba 3.0 South America (10 countries) 2.8 El Salvador 2.0 Argentina 2.0 Brazil 1.6 The Caribbean 1.6 Paraguay -2.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Source : Economic Commission for Latin America and the Caribbean (ECLAC), based on official figures.
Growth in the Caribbean increases from 0.4% in 2011 to 1.6% in 2012 THE CARIBBEAN: RATE OF GDP GROWTH, 2012 (In percentages) Suriname 4.3 Guyana 3.8 Latin America & the Caribbean 3.2 Dominica 2.6 Bahamas 2.5 Belize 2.4 St. Lucia 2.3 Antigua & Barbuda 2.3 Grenada 1.9 St. Vicente y the Grenadines 1.8 The Caribbean 1.6 Trinidad & Tobago 1.0 St. Kitts y Nevis 1.0 Jamaica 1.0 Barbados 1.0 0.0 1.0 2.0 3.0 4.0 5.0 Source : Economic Commission for Latin America and the Caribbean (ECLAC), based on official figures.
For 2013 a moderate recovery of growth in the region is foreseen, mainly due to an upturn in Brazil LATIN AMERICA: CONTRIBUTION TO REGIONAL GDP GROWTH BY COUNTRY 7% 6% 5% 4% Brazil Argentina 3% The Caribbean 2% Mexico 1% Central America 0% Rest of South America Latin America & the Caribbean -1% -2% -3% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source : Economic Commission for Latin America and the Caribbean (ECLAC), based on official figures.
Moderate recovery in some countries and a slight deceleration in others in 2013 LATIN AMERICA AND THE CARIBBEAN: GDP GROWTH RATE, 2013 (In percentages) Haiti 7.5 Panama 7.0 Peru 5.5 Paraguay 5.0 Nicaragua 5.0 Chile 4.8 Dominican Republic 4.5 Equador 4.5 Colombia 4.5 Bolivia (Plur. St. of) 4.5 Latin America & the Caribbean 4.0 Uruguay 4.0 Mexico 4.0 Costa Rica 4.0 Brazil 4.0 Guatemala 3.5 Argentina 3.5 Venezuela (Bol. Rep. of) 3.0 Honduras 3.0 Cuba 3.0 The Caribbean 2.2 El Salvador 2.0 0.0 2.0 4.0 6.0 8.0 Source : Economic Commission for Latin America and the Caribbean (ECLAC)
Modest and vulnerable increase in growth in the Caribbean: from 1.6% in 2012 to 2.2% in 2013 THE CARIBBEAN: GDP GROWTH RATE, 2013 (In percentages ) Guyana 4.5 Latin America & the Caribbean 4.0 Suriname 4.0 Bahamas 2.7 Dominica 2.6 Antigua & Barbuda 2.6 St. Lucia 2.5 Belize 2.5 Trinidad & Tobago 2.2 Grenada 2.2 The Caribbean 2.2 St. Vicente y the Grenadines 2.0 St. Kitts y Nevis 1.8 Barbados 1.5 Jamaica 1.3 0.0 1.0 2.0 3.0 4.0 5.0 Source : Economic Commission for Latin America and the Caribbean (ECLAC)
Regional performance in 2012: Inflation, employment and wages External sector Policies: Fiscal and Monetary
Inflation maintained its downward trend of the first quarter of the year LATIN AMERICA AND THE CARIBBEAN: CONSUMER PRICE INDEX, FOOD PRICE INDEX AND CORE INFLATION, 2009-2012 (12-month change, simple average) 16% 14% 12% 10% 8% 6% 4% 2% 0% January February March April May June August October November December January February March April May June July August October November December January February March April May June August October November December January February March April May June July July September September July September 2009 2010 2011 2012 CPI Core Food Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
Until mid-2012, at the regional level, there was a continuous increase of employment which positively affected consumption LATIN AMERICA AND THE CARIBBEAN (10 COUNTRIES): EMPLOYMENT RATE AND URBAN UNEMPLOYMENT RATE, FOUR QUARTER MOVING AVERAGE, 2009 TO SECOND QUARTER 2012 (In percentages) 56.50 9.00 8.50 56.00 8.00 55.50 7.50 55.00 7.00 6.50 54.50 6.00 54.00 5.50 53.50 5.00 Employment rate (left scale) Unemployment rate (right scale) Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
Wage increases help strengthen households’ purchasing power LATIN AMERICA (SELECTED COUNTRIES): CHANGE IN REAL WAGES IN THE FORMAL SECTOR BETWEEN THE FIRST HALF OF 2011 and THE FIRST HALF OF 2012 (In percentages) 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Brazil Chile Colombia Costa Rica Mexico Nicaragua Panama Uruguay Venezuela, (Bol. Rep. of) Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
With the exception of food, commodity prices are decreasing COMMODITY PRICES, 2002-2012 (Index: 2005=100) 300 Energy 250 200 Food 150 Agricultural Raw Materials 100 50 Metals & Minerals 0 2002M01 2002M06 2002M11 2003M04 2003M09 2004M02 2004M07 2004M12 2005M05 2005M10 2006M03 2006M08 2007M01 2007M06 2007M11 2008M04 2008M09 2009M02 2009M07 2009M12 2010M05 2010M10 2011M03 2011M08 2012M01 2012M06 Beverages Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of figures from the World Bank, “ Pink Sheet ” , August 2012 .
The terms of trade are deteriorating in most countries of the region LATIN AMERICA: ESTIMATED CHANGE IN THE TERMS OF TRADE, 2009-2012 a 20% 15% 10% 5% 0% -5% -10% -15% Latin America and South America Central America Mexico Brazil Caribbean the Caribbean (except Brazil) (except T&T) 2009 2010 2011 2012 Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures. a/ Figures for 2012 correspond to projections.
The exports of the region that will grow less than in 2011 are those destined for Europe LATIN AMERICA: ANNUAL CHANGE IN THE VALUE OF EXPORTS BY DESTINATION, 2011-2012 a 50% 40% 30% 20% 10% 0% -10% -20% I II III IV I II 2011 2012 United States European Union (27) Asia (incl. China) Latin America and the Caribbean Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures. a Projection.
Remittances recover, except for those originating from Europe, which are decreasing in 2012 LATIN AMERICA AND THE CARIBBEAN (9 COUNTRIES): CHANGES IN INCOME FROM WORKERS’ REMITTANCES, 2010-2012 Dominican Republic Nicaragua Mexico Jamaica Honduras Guatemala El Salvador Ecuador Colombia -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 2010 2011 2012 (Q1) Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
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