The economies of Latin America and the Caribbean registered a lower growth of 2.6 percent in 2013 against the earlier expectation of 3 percent, much the same as in 2012, according to a report published on Wednesday by the UN Economic Commission for Latin America and the Caribbean (ECLAC).
The "more modest" economic performance of the countries in 2013 was attributed to less buoyant external demand, greater international financial volatility and falling domestic consumption.
Slower growth in the regional powerhouses -- Brazil and Mexico -- has also weighed on the region, leading to their failure to reach the expected growth of 2.4 percent and 1.3 percent respectively.
The prolonged financial crisis in the euro zone and the slow recovery of the U.S. economy also affected Latin American countries as both the euro zone and the United States are the region's main trade partners.
However, the Santiago-based ECLAC also points out that the region's economic growth is still higher than the global rate, which lowered to 2.1 percent in 2013.
The CELAC, founded in 2010 to enhance integration among countries in the region, held its first summit in the Chilean capital of Santiago in January. Leaders of the 33 CELAC members reaffirmed their commitment to integration, solidarity and cooperation to face the world economic crisis and promote sustainable development in member states.
The PA, set up in 2011 as a trade bloc for deep and inclusive integration among members, had its seventh summit in Colombia in May and presidents of its four full-member countries (Colombia, Chile, Mexico and Peru) agreed to completely eliminate tariffs for all products, with 90 percent of those products to be free of taxes immediately.
Despite the cooling of economic growth in 2013, the region, which experienced an average growth rate of 4 percent since 2004, is seen to maintain a high potential for further growth, the ECLAC predicted.
The next year is expected to see a moderately favorable external environment to help boost external demand for the region's exports. Private consumption in the region will also continue to grow, though at a speed slower than in previous periods.
The regional economies will pick up pace with an average growth rate of 3.2 percent next year, according to the ECLAC.
In 2014, it is least possible that a recession will affect most of the Latin American countries, though some studies indicate a declining performance of the main economies including Brazil, Mexico and Argentina.
The ECLAC warned that Latin America and the Caribbean countries depend mainly on domestic consumption and commodity exports, leaving them vulnerable to external volatility.
The Latin American and Caribbean governments are suggested to diversify their economies and encourage social investment to boost productivity and growth in the region.
Source: Xinhua
