December 30, 2007
The economies of Caribbean and Latin American countries grew by more than five per cent this year; but the World Bank warned of a slowdown in growth in 2008 as a result of many factors, of which one is an economic slowdown in the United States. The international lending agency said that 5.1 per cent growth in 2007 was higher than the previous forecast of 4.8 per cent. But it warned that growth in the region would be reduced slightly next year, as a result of the stabilisation of commodity prices and the impact of the United States economic slowdown.
“While countries that export commodities have benefited from high prices, others, such as Central American countries, have been hit hard, as they are net importers of foods and energy,” the bank said in a statement.
“The good news is that there is good news in Latin America,” said Pamela Cox, World Bank vice-president for Latin America and the Caribbean, during an end-of-year Press briefing in Washington.
Cox, who also made reference to the Caribbean, said the region remained well prepared to face the mortgage loan crisis unleashed in the United States, but she said it was still unclear “what the impact will be in the rest of the world”. She warned that dangers still lurked for the region, particularly in “those countries that have strong trade ties with the United States and those countries that receive a large amount of remittances from the United States”. “Overall, we are going into 2008 very positive about the developments in Latin America and very positive about the role of the World Bank in the region.”
The World Bank’s prediction comes on the heels of a United Nations Economic Commission for Latin America and the Caribbean (ECLAC) report that regional economies were heading into their sixth consecutive year of strong growth. ECLAC said economic prospects in 2008 were expected to be cushioned from the financial turbulence sweeping the globe. “Regional economies will expand by an average 5.6 per cent this year, and are forecast to grow another 4.9 per cent in 2008,” it said.
ECLAC said the region had not experienced such sustained positive economic performance since the late 1960s and early 1970s. But it said that despite the brisk growth, the Caribbean and Latin America still lagged behind other developing countries, mainly in Asia, which are growing at more than seven per cent annually.