Which country will be damaged most if the price of basic goods falls?
In its 2013 macroeconomic report on Latin America and the Caribbean, the Inter-American Development Bank estimates the impact on incomes as a potential percentage of gross domestic product for Latin American countries in the event of a 25 percent reduction in the prices of primary goods. Under the title “Rethinking Reforms: How Latin America and the Caribbean Can Escape Suppressed World Growth,” the report estimates that the biggest loser would be Ecuador, with a fall of 4.5 percent in its GDP potential, followed by Bolivia, where it would drop by 3.8 percent. Venezuela and Mexico would end up with sizable reductions in their GDP potentials, 2 percent for Mexico, and 3 percent for Venezuela, while Chile and Peru would see their GDP potential decline by 1 to 1.5 percent. Argentina and Colombia would be the least affected countries in the region in this scenario, with a dip in GDP potential of about 0.5 percent.
Source: LatinTrade
