Latin America’s inflation will fall to its lowest rate in more than 25 years, while the region is set to reach its fourth consecutive year of economic growth. Chile will grow most, El Salvador the least.
BY CHRONICLE STAFF
DESPITE POLITICAL UNCERTAINTY and rising oil prices, inflation in Latin America is expected to post an average rate of 5.4 percent this year, the lowest in more than 25 years.
Meanwhile, the region’s economies are expected to grow a total of 3.8 percent, according to the International Monetary Fund (IMF). That’s higher than the fund’s estimates for 2006 GDP growth in the United States (3.3 percent) and the European Union (2.0 percent), but lower than the forecasts for the world (4.3 percent).
The GDP growth will be driven by a combination of factors, depending on countries. For oil-exporting countries like Ecuador and Venezuela, rising oil prices will help boost exports, but net importers of oil – especially in Central America – will be negatively affected. Chile will benefit from rising copper prices, while countries like Argentina, Brazil and Peru will likely continue their successful exports of agricultural products. And Colombia, Costa Rica and other coffee-exporters should benefit from tighter coffee futures prices during the first half of 2006. In terms of specific export markets, China is expected to continue growing its share, while exports to the United States and Europe are also picking up.
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