After 2 Years in the Doldrums, Economies in the Americas are Back on the Road to Growth

Latin American and Caribbean nations are expected to return to economic growth this year after two consecutive years in the negative column. But when analysts talk about the prospects for 2017, the words they use are slow, shallow recovery and subdued growth.

The U.N.’s Economic Commission for Latin America and the Caribbean — ECLAC — estimates regional GDP growth will reach 1.3 percent this year, compared to a contraction of 1.1 percent in 2016. Commodity prices are still relatively low but improving, the Chinese economy has slowed, and global growth rates are fairly anemic — with uncertainty in major markets from the United States to the euro area….

…This will be a year of adjustments in Latin America and the Caribbean as regional governments try to encourage the green shoots of recovery at the same time they endeavor to make the fiscal accommodations necessitated by lower commodity prices for their most important exports.

But there are some bright spots: The economies of Panama, the Dominican Republic, Peru, Bolivia, Costa Rica, Guyana, Honduras and Nicaragua are all expected to grow by 4 percent or more. However, poor performances by Venezuela, Brazil and Ecuador are expected to pull down the region’s total.

Powerhouse Brazil has probably hit bottom, but its recovery is still fragile.

The Venezuelan economy continues in free fall. It’s expected to shrink by 3.7 percent on the heels of an 8 percent decline in 2016, according to ECLAC. Annual inflation is estimated at a whopping 741 percent….

…Despite current challenges, Susan Segal, president and chief executive of the Americas Society/Council of the Americas, says she is feeling upbeat about the region. “It’s not only about today’s growth numbers. It’s also about a sense of optimism,” she said….

Read the full article here.