Region’s economic outlook dismal, says ECLAC

[2008 Economic meltdown caption] According to preliminary figures from the Economic Commission for Latin America and the Caribbean (ECLAC), the gross domestic product (GDP) of the 33 Latin American and Caribbean countries will grow a projected 1.9 per cen

NEW YORK, United States, December 22, 2008 – After six years of strong performance, Latin American and Caribbean economies will slow considerably next year as the global economic meltdown takes its toll on the region and unemployment rises, a United Nations agency for economic development has said.

According to preliminary figures from the Economic Commission for Latin America and the Caribbean (ECLAC), the gross domestic product (GDP) of the 33 Latin American and Caribbean countries will grow a projected 1.9 per cent in 2009, a marked drop from the 4.6 per cent rate a year earlier.

It added that unemployment will increase to between 7.8 to 8.1 per cent next year, hitting low-income households and those headed by women the hardest and pushing many workers into the informal economy. However, the report said, inflation will slow to six per cent next year, from 8.5 per cent the previous year.

“Today the region is better prepared than in previous occasions to handle a crisis, but in no case is it immune,” ECLAC said.

The Commission noted that between 2003 and 2008, the region enjoyed healthy economic growth as employment expanded and poverty shrank, and most countries posted external and fiscal account surpluses. But it said that the international economic slowdown is already undoing those gains.

According to the report, foreign direct investment (FDI) will also contract next year.

ECLAC has recommended that developed and developing countries coordinate macroeconomic steps and bolster intra-regional trade and integration to manage the crisis. It also suggested that international agencies sufficiently finance counter-cyclical measures and that regional financial bodies inject liquidity into the global financial system.