Economic Survey of Latin America and the Caribbean
Total Page:16
File Type:pdf, Size:1020Kb
2014 Economic Survey of Latin America and the Caribbean Challenges to sustainable growth in a new external context Challenges to sustainable growth in a new external context Alicia Bárcena Executive Secretary Antonio Prado Deputy Executive Secretary Jürgen Weller Officer-in-Charge, Economic Development Division Ricardo Pérez Chief, Publications and Web Services Division www.cepal.org/de The Economic Survey of Latin America and the Caribbean is issued annually by the Economic Development Division of the Economic Commission for Latin America and the Caribbean (ECLAC). The 2014 edition was prepared under the supervision of Jürgen Weller, Officer- in-Charge of the Division. In the preparation of this edition, the Economic Development Division was assisted by the Statistics Division, the ECLAC subregional headquarters in Mexico City and Port of Spain, and the Commission’s country offices in Bogota, Brasilia, Buenos Aires, Montevideo and Washington, D.C. Part I, entitled “The economic situation in Latin America and the Caribbean in 2014”, was prepared by Jürgen Weller with input from the following experts: Luis Felipe Jiménez, Alexander Loschky and Cameron Daneshvar (external sector), Sandra Manuelito (economic activity and prices), Seung-jin Baek (prices), Ramón Pineda and Rodrigo Cárcamo (monetary, exchange-rate and macroprudential policies), Ricardo Martner, Juan Pablo Jiménez, Michael Hanni and Ivonne González (fiscal policy). Jürgen Weller wrote the section on employment and wages and the economic projections were produced by Sandra Manuelito, Alexander Loschky and Claudio Aravena. Part II, entitled “Challenges to sustainable growth in a new external context”, was prepared by Luis Felipe Jiménez and Jürgen Weller, with input from Claudio Aravena, Rodrigo Cárcamo, Cameron Daneshvar, Luis Eduardo Escobar, Juan Pablo Jiménez, André Hofman, Osvaldo Kacef, Alexander Loschky, Sandra Manuelito, Ricardo Martner, Ramón Pineda and Andrea Podestá. The country notes are based on studies conducted by the following experts: Olga Lucía Acosta, Juan Carlos Ramírez and Luis Javier Uribe (Colombia), Anahí Amar and Daniel Vega (Argentina), Verónica Amarante (Uruguay), Dillon Alleyne (Jamaica and Suriname), Rodrigo Cárcamo (Peru), Cameron Daneshvar (Paraguay), Maria Kristina Eisele (Honduras), Stefanie Garry (Costa Rica and Guatemala), Randolph Gilbert (Haiti), Michael Hendrickson (Bahamas and Belize), Michael Hanni (Plurinational State of Bolivia), Luis Felipe Jiménez (Chile), Alexander Loschky (Bolivarian Republic of Venezuela), Sandra Manuelito (Ecuador), Sheldon McLean (Eastern Caribbean Currency Union), Rodolfo Minzer (Panama), Carlos Mussi (Brazil), Ramón Padilla (Mexico), Machel Pantin (Trinidad and Tobago), Willard Phillips (Barbados), Indira Romero (Cuba), Francisco Villarreal (El Salvador), Kohei Yoshida (Guyana) and Willy Zapata (Nicaragua and Dominican Republic). Alejandra Acevedo, Alda Díaz, Ivonne González, Michael Hanni, Carolina Serpell and Yusuke Tateno were responsible for the processing and graphical presentation of the statistical data. Notes The following symbols have been used in the tables shown in the Survey: • Three dots (…) indicate that data are not available or are not separately reported. • A dash (-) indicates that the amount is nil or negligible. • The word “dollars” refers to United States dollars unless otherwise specified United Nations Publication ISBN: 978-92-1-121862-6 • E-ISBN: 978-92-1-056542-4 ISSN: 0257-2184 LC/G.2619-P • Sales No. E.14.II.G.3 Copyright © United Nations, August 2014. All rights reserved Printed in Santiago, Chile • 14-20391 This publication should be cited as: Economic Commission for Latin America and the Caribbean (ECLAC), Economic Survey of Latin America and the Caribbean, 2014 (LC/G.2619-P), Santiago, Chile, 2014. Applications for the right to reproduce this work are welcome and should be sent to the Secretary of the Publications Board, United Nations Headquarters, New York, N.Y. 10017, U.S.A. Member States and their governmental institutions may reproduce this work without prior authorization, but are requested to mention the source and inform the United Nations of such reproduction. Contents Foreword and executive summary ..........................................................................................................................9 Part I The economic situation in Latin America and the Caribbean in 2014 ..................................................................19 Chapter I Regional overview ................................................................................................................................................21 Introduction .....................................................................................................................................................23 A. The external context ...................................................................................................................................23 1. The pace of world economic growth picks up slightly ...........................................................................23 2. International financial market conditions are still returning to normal ...................................................25 3. The pace of global trade growth remains sluggish .................................................................................26 B. The external sector ......................................................................................................................................27 1. Most of the region’s export commodity prices are down slightly or flat ..................................................27 2. The region’s terms of trade weakened somewhat, with differences from one country to the next ................................................................................................................................28 3. Exports and imports stagnate .................................................................................................................29 4. Remittances from the United States are growing ....................................................................................31 5. Tourism registers healthy growth rates ...................................................................................................32 6. The current account deteriorates slightly ...............................................................................................32 7. Financial flows and funding terms are holding steady ............................................................................33 C. Domestic performance ................................................................................................................................36 1. Economic activity remained sluggish throughout the region during the first quarter of 2014 .....................36 2. Household consumption and gross fixed capital formation slow ...........................................................39 3. Regional inflation rises slightly, but with differences between countries ................................................40 4. Job creation is still weak, but unemployment continues to fall ...............................................................43 5. The modest rise in real wages continues ................................................................................................45 D. Macroeconomic policy ...............................................................................................................................45 1. In a number of countries, authorities remain watchful for slowing domestic demand but their monetary policy reveals growing concern also as to the potential for inflationary pressure .........................................................................................................................45 2. Lending rates are trending up; lending to the private sector is cooling in many of the countries ................46 3. There are no signs of a significant increase in international reserves ......................................................47 4. Several of the region’s currencies continued to depreciate early in the year, but this trend eased in the second quarter .............................................................................................48 5. The region implemented macroprudential instruments to improve financial regulation and oversight ........................................................................................................................50 6. The fiscal accounts are still running deficits ...........................................................................................51 7. Public revenues are expected to increase slightly in 2014 .....................................................................51 8. Public spending (especially current expenditure) is expected to grow faster than economic activity ..........................................................................................................................53 9. Public debt is inching up but on average remains relatively low ............................................................53 E. Outlook and challenges ..............................................................................................................................54 1. Growth prospects for 2014 ....................................................................................................................54 2. Policy challenges for 2014 ....................................................................................................................56