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Uruguay Among Countries to Experience Highest Economic Growth in Region

ECLAC forecast that economic growth in Argentina, Chile, Uruguay and Venezuela, will be at 6 percent or more in 2005

Posted: April 21, 2005 Related item: Latin American, Caribbean Growth in 2004 Strongest in 24 Years    

Washington -- The United Nations is forecasting relatively positive economic news in 2005 for Latin America and the Caribbean, after the region enjoyed a banner year in 2004.

In an April 20 statement, the U.N. Economic Commission for Latin America and the Caribbean (ECLAC) said economic growth in the region is expected to be at about 4.4 percent, as compared to 2004, when growth was 5.8 percent, the region's highest rate since 1980.

ECLAC forecast that the region's best economies in 2005 will be in Argentina, Chile, Uruguay and Venezuela, with growth in those countries at 6 percent or more.

ECLAC forecast growth rates of 4 percent for Brazil, 3.7 percent for Mexico and Central America, and about 4 percent for the Caribbean and the nations of the Andean region -- Colombia, Peru, and Ecuador.

ECLAC made its forecast in a new report, Latin America and the Caribbean: Projections 2005. (Report is in Spanish.)

The commission said lower growth in 2005 in Latin America and the Caribbean reflects a slowdown in the world economy and more moderate growth in several nations, such as Argentina, Uruguay and Venezuela, that experienced strong recoveries in 2004.

The region's rate of inflation will remain within year-2004 ranges, at about 7 percent. However, some countries will see a slight rise in inflation, due to higher fees for regulated services and international prices for food and oil.

Fiscal policy in 2004 in Latin America and the Caribbean was characterized by improvements in public finance in several countries. In 2005, expenditures should remain under control, while revenues are forecast to rise slightly, said ECLAC.

High indebtedness observed in some countries, however, will make their growth vulnerable to an increase in interest rates in the United States.

ECLAC said the U.S. dollar depreciation against the euro and the yen, apparent in 2004, is expected to continue in 2005, with "important consequences" for the region, since it will give "additional impetus to several countries' efforts to diversify their export destinations." ECLAC added that the U.S. dollar depreciation will help make Latin America and the Caribbean an attractive destination for tourists from Asia and Europe.

Source: Washington File



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