The Economic Commission for Latin America and the Caribbean (ECLAC) maintained its estimate of regional average growth by 2.2% for 2018, after growing by 1.2% last year, reported the United Nations agency through a Press release.
This regional projection is similar to the one delivered in December 2017, when the institution issued its annual report Preliminary Overview of the Economies of Latin America and the Caribbean 2017.
During 2018, the greater dynamism of external demand would stimulate economic activity in Latin America and the Caribbean. Also, domestic demand will play an important role in accelerating growth, although with differences between components, says ECLAC.
In particular, and even though it will remain low, a greater investment contribution is expected, compared to previous years, while private consumption will continue to be a relevant driver of domestic demand.
The regional commission of the United Nations adds that, in some cases, the rise in real wages and the increase in credit -as well as the growth of remittances in the case of the Central American region- are factors that explain the increase in consumption.
Regarding public spending, ECLAC indicates that fiscal consolidation is expected to remain on average during 2018, so that investment and public spending will have a lower contribution to the growth of the product.
As in previous years, during 2018 growth will show heterogeneous dynamics among countries and subregions.
The economies of South America would grow by 2% (compared to the 0.8% registered in 2017), mainly as a result of the greater dynamism in Brazil. Similarly, in several countries that have been growing at moderate rates, there will be an acceleration in economic activity: Chile (3.3%), Colombia (2.6%) and Peru (3.5%).
For the economies of Central America the forecast of a 3.6% growth rate is also maintained, above the 3.4% recorded in 2017. Specifically, Costa Rica would grow 3.4% below Panama, which will be the economy with the highest rate of expansion (5.6%), followed by the Dominican Republic (5%) and Nicaragua (5%).
For the English-speaking Caribbean, an average growth of 1.4% is projected for 2018, greater than the 0.1% in 2017.
According to ECLAC, the activity projections for Latin America and the Caribbean take place in a more favorable international context than in recent years, but in which important uncertainties persist regarding protectionist tendencies, financial dynamics and geopolitical risks.