ECLAC predicts Caribbean economies will contract this year
The Economic Commission for Latin America and the Caribbean (ECLAC) has revised downward its growth projections for the region's economic activity, forecasting an average contraction of -0.6 per cent in 2016.
ECLAC said that this new estimate reflects that the contraction experienced by regional gross domestic product (GDP) in 2015 (-0.5 per cent) will extend to the current year.
"The new projections evidence the difficult global scenario in which low growth continues in developed countries, there is a significant deceleration in emerging economies (China in particular), increasing volatility and costs in financial markets, and low prices for commodities - especially hydrocarbons and minerals," said ECLAC.
"In addition, there is greater weakness in internal demand in the region's countries, with the decline in domestic investment accompanied by a deceleration of consumption," it added.
As in 2015, during 2016, ECLAC said the growth dynamic shows marked differences between countries and subregions.
According to ECLAC, the economies of South America - which are specialised in the production of commodities, especially oil and minerals, and have a growing degree of trade integration with China - will record a contraction of -1.9 per cent.
Meanwhile, the growth rate for Central American economies is forecast at 3.9 per cent, below the figure registered in 2015 (4.3 per cent).
If Central America and Mexico are taken together, ECLAC said projections for 2016 are 2.6 per cent, below the 2.9 per cent reached in 2015.
For the English- or Dutch-speaking Caribbean, estimated growth will be around 0.9 per cent in 2016, ECLAC said.
"This new scenario for the economies of northern Latin America and the Caribbean reflects a weaker-than-expected recovery in the United States and shows the effects official policy adjustments that have been adopted in some economies of this subregion," the United Nations agency said.