With better commodity export prices and an improved international context, the Latin America and the Caribbean region will record a small positive growth rate this year – with the exception of Venezuela and two Caribbean countries, according to a new report of the UN Latin America commission.
The Economic Survey of Latin America and the Caribbean 2017 foresees that, after two years of contraction, nearly all countries in the region will experience, on average, 1.1 per cent positive growth rates in 2017 – except for Venezuela, whose gross domestic product (GDP) is seen falling -7.2 per cent; and Saint Lucia and Suriname, which is forecast to contract -0.2 per cent.
“To resume medium- and long-term growth, countercyclical policies are needed that not only focus on reducing the cycle's fluctuations, but also on modifying those specific characteristics that negatively influence growth and the productive structure of countries in the region,” said Alicia Bárcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), during a press conference in Santiago where the document was presented.
The UN body's annual report underscores the importance of macroeconomic policies to invigorate long-term growth and move toward the necessary structural change in the region's economies.
“This means moving toward countercyclical frameworks for fiscal policy that defend and promote public and private investment. This involves revising fiscal rules so they continue to serve as pro-stability instruments, but also as pro-investment. This fiscal framework must be accompanied by a financial policy aimed at credit stabilization and a monetary policy that supports investment growth and goes beyond instruments such as the interest rate,” she explained.