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U.N. Says Latin America, Caribbean Continuing Economic Upswing

Region on track for fourth straight year of economic growth

Posted: August 8, 2005

Economic Survey of Latin America and the Caribbean, 2004-2005Washington -- Latin America and the Caribbean are on track to enjoy four straight years of economic growth, says the United Nations.

In a new report released August 3, the U.N. Economic Commission for Latin America and the Caribbean (ECLAC) said the region will grow 4.3 percent in 2005 and as much as 4 percent in 2006.

Should these forecasts prove accurate, ECLAC said, this would make four straight years of economic growth while achieving a total rise in per capita gross domestic product (GDP) of about 10 percent for 2003-2006.

ECLAC said the region has been reaping the benefits of a worldwide "external environment" marked by global growth in GDP, an expansion of international trade, higher commodity prices, and low interest rates. At the same time, an upswing in demand is being driven by exports of goods and services. The continuation of the economic growth process is beginning to create opportunities for investment, said ECLAC.

For 2005, Argentina is leading regional growth with a 7.3 percent increase over 2004, followed by Venezuela with 7 percent, Uruguay with 6.2 percent, Chile with 6 percent, Peru with 5.5 percent, and Panama with 4.5 percent, said ECLAC in its report called Economic Survey of Latin America and the Caribbean, 2004-2005.

"There is room for some optimism," since the region "is better prepared to face the challenges," ECLAC said. But the agency added that quicker growth is needed to deal with serious problems in the Latin America/Caribbean labor market.

In 2004, exports from the region rose 22.8 percent, compared to 8.8 percent in 2003, while imports rose 21.7 percent, completing a recovery that began in 2003 after a decline in 2002. Money transfers (remittances) sent by migrants, mostly in the United States, back to their home countries in Latin America and the Caribbean rose in 2004 by $6.4 billion, or 18.3 percent.

Mexico is the world's number-one country for receiving money sent home by migrants in the United States. Immigration experts report that these remittances sent by Mexican workers to their homeland totaled about $17 billion in 2004.

A rise in both employment and wages has boosted private consumption, ECLAC said, but it warned that the region must stimulate saving and investment because risks persist. These risks include "the possibility of a traumatic correction to some existing imbalances in the international economy and the danger of a protectionist backlash," said ECLAC.

The report is available at the ECLAC Web site.

Eric Green
Washington File Staff Writer

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