Brazil's economy will grow 7 percent, but Argentina will have the highest growth among leading economies.
BY MARY SUTTER
MIAMI – Stable financial systems and internal demand from a growing consumer class will support robust regional GDP growth of 5.9 percent in Latin America this year, forecasts Kathryn Rooney Vera, director of research and strategy at Bulltick Capital Markets in Miami.
“Latin America is not a derivative of China or the United States. It has taken on its own force,” Rooney Vera told a gathering of top corporate financial executives at the invitation-only Latin Trade CFO Forum on Friday.
Riding the effects of its neighbor’s booming economy, Argentina is expected to lead the region this year, with GDP growth of 7.5 percent, she predicts. Brazil continues on its path of robust growth, where Rooney Vera projects a 7 percent increase in GDP.
Public capital spending in response to the global economic crisis has stimulated additional private investment in Peru, where Rooney Vera foresees GDP growth of at least 6.6 percent for the year.
The Colombian economy is on track for 6 percent GDP growth in 2010, Rooney Vera forecasts. She sees a similar growth rate for Mexico, as the economy rebounds from its 6.5 percent contraction in 2009.
Chile has bounced back surprisingly from the effects of the April earthquake and GDP should increase by at least 5 percent there, Rooney Vera predicts.
Her forecasts assume no growth in Europe and low growth in the United States.Rooney Vera believes that the heightened concerns about a potential double-digit recession in the United States are misplaced. “Unemployment [in the United States] is the major headwind to the economic recovery,” she said. Although a number of key indicators may be weak, “it is important to differentiate between disappointing and contracting.”
China will remain the main driver of trade with Latin America, she said. Fears of a "hard landing" for the Asian powerhouse are similarly overblown, she said. Rooney Vera expects China to post 10 percent GDP growth this year, a deceleration that will also bring credit growth to more sustainable levels and tame inflation.
© Copyright Latin Business Chronicle