Latin America and Caribbean record solid economic growth figures, UN reports

Latin America and the Caribbean have posted positive economic gains for the sixth year in a row, despite the global downturn, with gross domestic product (GDP) rising nearly 5 per cent this year, according to the most recent estimates of the United Nations office in the region.

Economic growth for 2008 did not match the nearly 6 per cent expansion recorded last year, but GDP per capita is forecasted to increase by 3 per cent in the region for the fifth consecutive year, marking the first time this has happened in four decades.

The “Economic Survey of Latin America and the Caribbean 2007-2008, Macroeconomic policy and volatility,” which was released yesterday, also noted that unemployment has steadily fallen every year since 2003, decreasing from 8 per cent in 2007 to an estimated 7.5 per cent this year.

Also continuing to drop is the poverty rate, which has been slashed by over 9 per cent since 2002, propelled by economic growth, falling joblessness, higher quality employment and improved non-wage income, such as remittances.

The UN Economic Commission for Latin America and the Caribbean (ECLAC) said that the region will not be immune to the current global market turmoil, but it will be better able to weather the storm due to its economic strength.

Thanks to GDP surpluses, the area’s governments have been able to earmark more resources for public investment and social spending, as well as create bulwarks in case of economic turbulence in the future.

Additionally, the region’s countries have substantially cut back their public debt, dropping from 36 per cent of GDP in 2006 to 33 per cent of GDP last year.

However, the report cautioned that rising inflation rates, as well as soaring food and oil prices, could slow the area’s stellar growth, which it predicted will continue next year, albeit at a lower pace of 4 per cent.