Although Latin America as a whole is posting its worse economic growth in five years, Ecuador continues to rank near the top. The year marks the region’s slowest economic growth since 2009, when the global financial crisis hammered economies around the world.
Latin America’s average gross domestic product (GDP) will increase this year by just 1.1 percent, according to a preliminary overview published this week by the United Nations Economic Commission for Latin America and the Caribbean, or ECLAC.
The figure is slightly lower than recent projections by the World Bank and the International Monetary Fund. It also looks like sloth-speed compared with the rate the UN estimates for the world’s developing countries overall: 4.4 percent GDP growth.
Next year, the UN commission estimates the region’s overall performance could recover to 2.2 percent, following a little recovery in the second half of 2014.
There were exceptions to the slow growth, including Ecuador, fourth among region’s 23 countries with a positive rate of 4%. The top performing economies, in Panama and the Dominican Republic, are expected to grow at 6% in 2014.
A number of factors are tripping up the region, one of them China. China has established itself as the top trading partner for several Latin American countries, particularly those that export raw materials, ECLAC notes. This was a big driver for some of the region’s economies in what the World Bank calls Latin America’s “golden” pre-global crisis years, when GDP growth rates averaged 4 to 5 percent.
But as China’s economic growth slows, so does its appetite for imports. Weak demand in the developed world isn’t helping, either, as the United States and European economies slowly recover. Domestic consumption in some Latin American countries has weakened this year, too.
Graphic: United Nations Economic Commission for Latin America and the Caribbean