Policymakers must do more to unlock private capital in Latin America

Governments aren’t doing enough to encourage private investment in Latin American countries whose medium to long-term growth depends on their ability to weather external shocks, the Economic Commission for Latin America and the Caribbean (ECLAC) argues.

Daniel Titelman, director of the economic development division of ECLAC

In its recent report, ECLAC gives cause for cautious optimism about growth prospects in the Latin American and Caribbean regions. It states that 2017 could produce a total average expansion of 1.2 percent, leading to an economic recovery of 2.2 percent annual growth in 2018, which would be the highest rate of growth the region has achieved in five years.

“The economy of our region continues to be determined by the external context and we are not yet armoured to improve growth,” said Alicia Bárcena, ECLAC executive secretary, during the presentation of the report.

For the Central American economies, a growth rate of 3.4 percent is expected for 2017 and 3.5 percent for the year in 2018. In the English-speaking Caribbean, damage caused by Hurricanes Irma and Maria will likely undermine growth, slowing it to around 0.3 percent by the end of the current year. The growth rate could recover in 2018 however if plans for reconstruction reach adequate scale. Daniel Titelman, director of the economic development division of ECLAC, toldDevelopment Finance that public-private collaborations on projects must target more diverse areas of need, such as infrastructure, technological innovation and energy.

“It is important that governments and financial development institutions identify opportunities to mobilise resources and thus diversify the economy of the region,” said Titelman.

South American economies broadly specialise in the production of primary goods including oil, minerals and soft commodities. After two years of economic contraction due to slower economic growth in major importing countries such as China, these economies are expected to grow at a rate of 0.7 percent in 2017.

Original source: DevFin.
Posted on 25 October 2017