Caribbean, LATAM economies to show economic growth: ECLAC

A report by the Economic Commission for the Caribbean and Latin America (ECLAC) states that the Latin America and the Caribbean will maintain the recovery that began in the second half of 2009 following the international economic crisis, and will grow by 4.7 per cent primarily due to higher internal demand.

However, the report released Wednesday in Washington, projects only 1.9 per cent growth for the Caribbean.

The Economic Survey of Latin America and the Caribbean 2010-2011 points out that this growth implies a 3.6 per cent rise in per capital GDP, noting that the current situation calls for the leadership in the region to pay close attention to the macroeconomic policy challenges that the region will be facing.

ECLAC Executive Secretary Alicia Bárcena said the region must recover "the fiscal space in order to be able to take measures to ensure sustained growth with productive employment and equality.”

The United Nations agency said In 2011, regional growth is mainly being driven by private consumption, driven by improved labour indicators and increased credit.

At the same time, it adds, the fact that idle productive capacity is being used up to sustain internal demand is pushing up investment, which is benefiting from greater credit availability to return to pre-crisis levels.

It projects a fall in unemployments rates from 7.3 per cent in 2010 to between 6.7 percent and 7 per cent in 2011. 

With respect to growth for 2011 ECLAC says Panama will lead with 8.5 per cent, followed by Argentina at 8.3 percent, Haiti 8 per cent and Peru 7.1 per cent.

ECLAC states that rising international food and fuel prices have been pushing up inflation. As a result, several stated have toughened their monetary policy, which has increased the difference between internal and international interest rates. 

It says this may lead to an appreciation in the region's currency exchange rate.