Guyana’s Gross Domestic Product (GDP) has been projected by the Economic Commission for Latin America and the Caribbean (ECLAC) to reach a rate of 4.8% in 2013 – holding steady with the calculation for 2012.
This compares favourably with both the country’s Caribbean Community (CARICOM) and hemispheric neighbours. CARICOM-wide growth is not expected to exceed 2%, for instance.
But what is the state of affairs within the wider neighbourhood?
For one, recent surges in growth among economic front-runners such as Mexico and Chile have slowed dramatically. GDP growth of 6.9% in Brazil in 2010 is now estimated to reach 2.5% in 2013 – albeit a recovery from the 2012 rate of 0.9%. Similarly, Mexico’s relative resilience following the shock of 2008 is now showing signs of decline with a forecasted growth rate of 2.8% in 2013.
There were also noteworthy slowdowns in the economies of Chile, Panama and Peru within the first half of 2013.
In the context of an overall projection of 3% growth overall, ECLAC has pointed to systemic weaknesses within the wider region including high dependency on exports to Europe and China, growing current account deficits, major fiscal constraints in the Caribbean, Central America and Mexico, and “South American vulnerability due to its dependence on natural resources,” according to a recent ECLAC report.
There is also the view that high dependence on the stimulus occasioned by increased consumption has contributed to the slowdowns in the face of far more modest rates of economic activity, than envisaged.
“Meanwhile,” the ECLAC Economic Survey of 2013 says, “the contribution of investment to GDP will be modest, and net exports will make a negative contribution owing to the larger increase in imports than exports. Exports were down in the first half of 2013, and are probably facing the end of the boom period in commodity prices.”
The global outlook is for growth to hold steady at 2.3% with developing countries providing the greatest impetus to economic turnarounds.
Within Latin America and the Caribbean, Paraguay’s roller-coaster economic ride takes it to 12.5% growth in 2013, following negative growth of -1.2% in 2012. Panama is next with 7.5%, Peru (5.9%), Bolivia (5.5%) and Nicaragua (5.0%).
Of some concern are the falling fortunes of exports, particularly in the minerals sector which are being linked to the continuing upheavals in Euro Zone markets and the slowdown of growth in China.