Brazil sees its best result in 14 years, while Uruguay leads all other countries in GDP growth, ECLAC estimates.
BY CHRONICLE STAFF
Brazil's economy, Latin America's largest, will likely end the year with an expansion of 5.9 percent, according to new estimates from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). That will be its best performance in 14 years, according to a Latin Business Chronicle analysis of data from the International Monetary Fund.
The growth is better than most economists had predicted throughout the year and confirms 2009 as one of Brazil's best ever. The estimate also comes as new data shows October retail sales were higher than expected, expanding by 10.1 percent over the same period last year. However, most experts expect November and December will show a slowdown thanks to the tightening of consumer credit.
URUGUAY: REGION'S BEST
Another major surprise is Uruguay, which will likely see its GDP grow by 11.5 percent this year. according to ECLAC. That's the highest growth in Latin America and its best result since 2004. This year, the South American country saw exports surge - partly due to agriculture expanding strongly and partly thanks to the opening of a $1 billion paper mill built and operated by Finland-based Botnia.
Peru and Panama will still be among the top winners, however. Peru's economy should expand by 9.4 percent this year, while that of Panama is likely to grow by 9.2 percent. "Despite a deteriorating global backdrop and a U.S. recession, we believe that public works related to the expansion of the Canal and other sizable infrastructure projects will remain key drivers of economic activity," JP Morgan analyst Franco Uccelli said in a commentary yesterday.
Mexico, the second-largest economy in the region, will suffer from the second-lowest growth in the region - only 1.8 percent (its lowest level in five years). Only Haiti can boast a worse result, with 1.5 percent GDP growth.
Venezuela, the fourth-largest economy, will see an expansion of only 4.8 percent - or nearly half of its 8.4 percent growth last year.
Latin America's combined GDP will expand by 4.6 percent this year, ECLAC says in its latest report Preliminary Overview of the Economies of Latin America and the Caribbean 2008, released today.
Next year will see a clear slowdown in all economies except Haiti, which will grow at its same low levels. Peru will likely see the best growth at 5.0 percent, followed by Panama at 4.5 percent growth and Cuba at 4.0 percent growth.
Brazil's economy will expand by 2.1 percent, which would be its lowest rate since 2003. Mexico will see the worst result, expanding its economy by a mere 0.5 percent, according to ECLAC. That will be its worst performance since 2001. Venezuela's GDP will grow by 3.0 percent, its lowest level since 2003, when the economy declined.
Latin America's combined GDP should expand by 1.9 percent in 2009, ECLAC estimates. That will be its worst result since 2002, according to the Latin Business Chronicle analysis.
Separately, ECLAC released new data on Latin America's trade in 2007 -- showing that the region's exports reached $751.4 billion, an increase of 13.3 percent from 2006. Imports grew by 17.6 percent to $687 million.
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