After two years of negative growth and four years of a slowdown, Latin America’s economy expanded in 2017 and experts predict the upward trend will hold in 2018.
Regional gross domestic product (GDP) shrank 1.2 per cent in 2016, but financial institutions, such as Banco Bilbao Vizcaya Argentaria, are forecasting a 1.1 per cent expansion in 2017 and a 1.6 per cent growth the year after.
Barcelona-based FocusEconomics, which provides economic forecasts and analyses for 127 countries, has a much more optimistic take on future regional growth, expecting a 2.4 per cent expansion in GDP in 2018 and 2.7 per cent in 2019.
The firm said in its latest report that it expected “the recovery of investor confidence in the region” to substantially spur private consumption and investment next year.
Raw material exports “are also going to benefit from higher global prices,” the firm added.
China played a key role in Latin America’s economic recovery in 2017, with regional exports to the Asian giant – its most dynamic market – increasing 30 per cent, according to the Inter-American Development Bank.
Louis Kuijs, head of Asia economics at Oxford Economics, estimated that even if global trade were to see a slight slowdown in 2018, regional growth will remain robust thanks to the synchronous expansion of the major economies, such as China.
A strong US dollar also helped spur Latin American economies, many of which are leading exporters to the United States, above all Argentina, Brazil, Chile, Colombia, Mexico and Peru, which credit-rating agency Standard & Poor’s (S&P) calls the “Latam-6.”