Latin America and Caribbean show some economic improvement, UN reports

The regional economy of Latin America and the Caribbean grew 1.5 per cent in 2003 and should continue that upward trend in the months to come, but the improvement does not offset the stagnation of recent years, the United Nations economic commission for the region, ECLAC, says.

Recovery in the United States and Japan as well as growth in China led to the improvement in economic performance in the region, ECLAC says in its report, Preliminary Overview of the Economies of Latin America and the Caribbean 2003.

"For the first time since 1997, there are no projections of negative growth for any Latin American economy next year," ECLAC says, but it adds that per capita output is 1.5 per cent lower than it was in 1997.

The growth figures for 2003 and 2004 compare with a drop of 0.4 per cent in 2002.

After six years of negative per capita growth and sluggish labour markets, 44.4 per cent of the population, or 227 million people, live under the poverty line. Improved economic activity drove a slight rise in the employment rate, but unemployment remains high at 10.7 per cent.

Reporting on the major economies, the report says Argentina posted a marked recovery of 7.3 per cent this year, after plunging 10.8 per cent in 2002. Chile, Costa Rica, Colombia and Peru posted growth rates of over 3 per cent, although Brazil managed barely positive growth of 0.1 per cent and Mexico grew by just 1.2 per cent.

In oil-exporting Venezuela growth fell 9.5 per cent, after a similar plunge in 2002, while the region's other economies posted weak performances, hovering around 2 per cent, it says.

A significant development, according to ECLAC, is the stronger domestic performance achieved by the countries after three years of turbulence. Most are emerging with well-controlled monetary and fiscal policies, along with more competitive exchange rates.

The Commission forecast that economies that were dealing with profound crises, such as Argentina and Brazil, are well on their way to recovery.