By: Ismael Rodriguez
After two years of enduring economic hardships and deprivation, Latin American and Caribbean countries have seen a glimmer of economic growth in 2017 and are expected to continue climbing uphill.
The U.N.’s Economic Commission for Latin America and the Caribbean estimated these nations to reach a 1.3 percent GDP growth this year, a climb from the 1.1 percent drop in 2016. And despite the relatively low commodity prices, there are signs of improvement in 2017.
Regional governments across these nations understand that to capitalize on the slight growth, they have to adjust this year by making fiscal accommodations based on the lower commodity prices for their most important exports.
In implementing these adjustments, the ECLAC’s reports predict the economies of Panama, the Dominican Republic, Peru, Guyana, Honduras, Bolivia, Costa Rica and Nicaragua to grow by 4 percent or more. For other neighboring countries like Venezuela, Brazil and Ecuador that are currently nursing a fallen economy, the climb back to stability will be at a slower pace.
Brazil, for example, a once economic powerhouse, is on the path to recovery despite being in a fragile economic state that is saddled with private and public debt, while the Venezuelan economy continues to free fall, plummeting by 3.7 percent this year on top of an 8 percent decline in 2016.
“It’s a huge market but there are a lot of regulatory hurdles. Every time we think we’ve got it figured out, it changes and we have to start again. It’s very fluid,” Charles Cheng, vice president of TM Cell, told the press of Brazil’s current economy.
Other Latin American countries remain steady despite a level of uncertainty, anticipating cautiously the direction of President Donald J. Trump’s foreign policy, which is bent on protecting the U.S. by reopening NAFTA negotiations for a better deal and building a wall at the Mexican border. The direction of his policy not only draws questions and concerns for Mexico, but across a wide spectrum of Latin and Caribbean countries that do business with the U.S.
But these countries have, adjusting to the current state of their countries, come together to supply each other. Argentina, who is a member of Mercosur along with Brazil, Paraguay, Uruguay and Venezuela, for example, has become a major proponent of market integration with the Pacific Alliance, which includes Mexico, Chile, Peru and Colombia.
In this manner, the economic growth is sure to rise in 2017. To substantiate the expectations, below is a chart from the Miami Herald, showing economic performance for Latin America and Caribbean countries in GDP rates, drawn from the reports constructed by ECLAC.