BY CHRONICLE STAFF
Latin America's exports will only grow by 2.8 percent this year, which is less than half the growth rate last year, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). Import growth, however, will continue to remain strong. Total Latin American imports will likely grow by 11.8 percent this year, ECLAC estimates. That compares with 13.2 percent last year.
“The financial crisis in the United States and the bleak outlook for the global economy will without doubt impact on Latin American and Caribbean international trade,” ECLAC says. “The expansion of the region’s exports is expected to slow because import growth has slipped, mostly in the United States and, to a lesser extent, in the European Union and Japan…. A prolonged slowdown in the United States will not only threaten the economies of Latin America and Caribbean economies directly through lower import demand and a decline in remittances, but also indirectly through its impact on Asian economies and trade.”
But there are big differences from country to country, in part depending on their reliance on exports to the slowing U.S. market. A mitigating factor for the region overall is that – at least in the short term - -continued strong exports to China are expected to help offset the decline to the United States. "All in all, the Latin American and Caribbean region is relatively well placed to withstand a slowdown in the United States and the resulting direct and indirect effects on its exports," ECLAC says in its new report, Latin America and the Caribbean in the World Economy, released last week. "Economic activity in Asia, led by China, will decelerate but remain relatively dynamic, which will help offset some of the decline in export demand."
The United States still is the top Latin American export market overall, but its share of the region's exports declined from 60 percent in 2000 to 42 percent last year. Meanwhile, exports to Asia (including China) went from 7 percent in 2000 to 18 percent last year, while exports to Latin America and the European Union also grew in that period, accounting for 18 percent and 15 percent, respectively, of Latin America's total exports last year, according to ECLAC.
While Latin America’s exports to the United States only grew by 4.2 percent last year, they grew by 49.4 percent to China and 19.3 percent to Germany, according to a Latin Business Chronicle analysis of official data from those countries.
IMPORTS REMAIN SOLID
Latin America’s imports are helped by still-solid economic growth in Latin America. The region's GDP will likely grow by 4.6 percent this year, the International Monetary Fund estimates. "Compared to previous shocks in the United States economy and the world at large, Latin America and the Caribbean is much less vulnerable than in the past, with a current account...
Keywords: Argentina, Brazil, Chile, Colombia, Mexico, Peru, Uruguay, Venezuela