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The IDB forecasts a low performance for 2019, following the trend that developed during this year, there were only a few exceptions
The annual report of the Inter-American Development Bank (IDB), which is responsible for describing the activities and operations of the previous year, including the balance of financial statements, was published this month under the coordination of economists Eduardo Cavallo and Andrew Powell.
Leer en español: El resumen del BID para la economía latinoamericana en el 2018
According to the report, the forecast for growth in Latin America and the Caribbean, driven by global trends along with internal factors, will be the lowest compared to the other regions. It is forecast that growth in the region will slow to 1.2%, while last year a growth of 1.6% was forecast.
The factors that would have contributed to these figures are, in the first place, the economic recession that Argentina is going through, added to the decrease in positive growth in Brazil and the serious economic crisis that Venezuela is going through.
Growth in relative terms
However, the regional figures do not necessarily reflect the situation of each country in the region. For example, in some countries, the dispersion of income levels, reflected in GDP per capita, has increased. Countries such as Chile, Panama and Uruguay presented a GDP per capita of approximately USD16,000 and it is foreseen that by 2023 this value will amount to USD20,000. On the other hand, countries such as Paraguay, Peru and the Dominican Republic have also risen in this indicator, but starting from lower bases.
Similarly, in Mexico, GDP per capita suffered a decrease of around USD 2,000, but it is expected to stabilize again by 2023 when it is expected to exceed the USD 11,000 that it reached in 2014. Similarly, GDP per capita Argentina's capita went from 10,700 USD to 9,000USD, approaching the 9,200USD figure reported by Brazil. However, for 2013 figures of USD 10,800 are foreseen for both countries.
For its part, in Venezuela the crisis does not go unnoticed. Towards the end of this year, the GDP per capita of the country shows a fall of more than 70% and stood at USD 3,300, while at its peak it was USD 11,500 (2011). In contrast, the case of Jamaica, a country that after a fiscal crisis that was forced to solve by implementing a primary fiscal surplus close to 7% of annual GDP, managed to stabilize by closing the year with a per capita GDP of 5,400 USD and having reduced its internal debt from 140% of GDP to 100%.
Some considerable increases in production
Finally, regarding world production, the report points out that Panama, the Dominican Republic and Chile stand out for having increased their participation in world production in the last 38 years. Likewise, Colombia, Paraguay and Peru are close to regain their global participation achieved in 1980. However, Venezuela lost approximately 40% of its share in world production and it is expected that in 2023 the country will have no more than 20% of the participation that it had in 1980.
Likewise, the publication of a new report has been announced in March 2019. This new report will focus on how different countries can cope with the new and high interest rates worldwide, among other issues.
LatinAmerican Post | Sofía Carreño
Translated from "El resumen del BID para la economía latinoamericana en el 2018"