29 July 2015: The UN Economic Commission for Latin America and the Caribbean (ECLAC) has released projections indicating that the countries of the region will grow 0.5% on average in 2015. The projections are contained in ECLAC’s annual report, titled ‘Economic Survey of Latin America and the Caribbean 2015,’ which was released during a press conference in Santiago, Chile.

The report contends that to reverse the region’s economic slowdown, more investments are required to boost growth and improve productivity. ECLAC has also forecasted the following among subregions and countries: South America will contract -0.4%; Central America and Mexico will grow 2.8%; and the Caribbean will expand 1.7%.

Regarding specific countries, Panama is expected to have the greatest expansion with a 6.0% increase, followed by Antigua and Barbuda (5.4%), and the Dominican Republic and Nicaragua (both with 4.8%). Mexico’s gross domestic product (GDP) will grow 2.4% and Argentina’s will rise 0.7%, while Brazil’s economy will contract by -1.5% and Venezuela’s is expected to decline by -5.5%.

The report contends that the economic slowdown is due to external and domestic factors, with external factors related to: stagnant global trade due to structural problems in the global economy; and a downward trend in prices for basic products, as well as greater volatility and uncertainty in international financial markets. Regarding domestic factors, the report states that a contraction in investment and the deceleration of consumption growth are contributing to decreasing domestic demand.

Alicia Bárcena, ECLAC Executive Secretary, said that revitalizing growth requires boosting public and private investment through: fiscal rules that protect investment; public-private associations and new sources of financing, such as the investment and infrastructure banks of the BRICS countries; and alternative mechanisms, such as green bonds and triangular loans cooperation.

The report underscores that the ability of countries to accelerate economic growth will depend on their ability to adopt “countercyclical policies” that stimulate investment, in order to reduce the effects of external shocks, and recommends establishing a public policy framework that promotes both public and private investment.

The report is made up of three parts. Part I outlines the region’s economic performance in 2014, analyzes trends for the first half of 2015, and provides the outlook for the rest of the year. Part II analyzes the dynamics of investment in LAC, the relationship between investment and the business cycle, public investment’s role, infrastructure gaps and challenges in financing private investment. Part III addresses the economic performance of LAC countries in 2014 and the first half of 2015, and includes respective statistical annexes, which present the main economic indicators of the countries of the region. [UN Press Release] [ECLAC Press Release] [Publication: Economic Survey of Latin America and the Caribbean 2015] [Presentation of ECLAC Executive Director]