The organization updated its growth projections for the region.

(April 11, 2018) The Economic Commission for Latin America and the Caribbean (ECLAC) updated its economic activity growth projections for the region’s countries during 2018 and kept its estimate for average regional expansion at 2.2%, after growing 1.2% last year, the United Nations organization stated today in a press release. This regional projection is the same as what was published in December 2017, when the institution launched its annual report Preliminary Overview of the Economies of Latin America and the Caribbean 2017.

During 2018, greater dynamism in external demand is seen helping stimulate the economic activity of Latin America and the Caribbean. Likewise, domestic demand will play an important role in the acceleration of growth, although with differences among components, ECLAC indicates. In particular, and even while continuing to be low, investment is expected to make a greater contribution than in previous years, while private consumption will remain a relevant driver of domestic demand.

The United Nations regional commission adds that, in some cases, the rise in real wages and the expansion of credit – along with growth in remittances, in the case of the Central American region – are factors that explain the increase in consumption. With regard to public spending, ECLAC indicates that fiscal consolidation is expected to remain on average during 2018, meaning that public investment and spending will make a lower contribution to growth.

As in previous years, during 2018 growth will show heterogeneous dynamics between countries and subregions, ECLAC indicates. The economies of South America are seen growing 2.0% (compared with the 0.8% recorded in 2017), mainly as a result of Brazil’s increased dynamism (2.2%). Furthermore, economic activity will accelerate in several countries that had been growing at moderate rates: Chile (3.3%), Colombia (2.6%) and Peru (3.5%).

Meanwhile, for the economies of Central America the growth forecast is also being held at 3.6%, above the 3.4% notched in 2017.

Among Latin American countries, Panama will be the economy that records the highest rate of expansion (5.6%), followed by the Dominican Republic (5.0%) and Nicaragua (5.0%).

For the English-speaking Caribbean, average growth is projected at 1.4% for 2018, above the 0.1% seen in 2017.

According to ECLAC, economic activity projections for Latin America and the Caribbean are being made in a more favorable international context than that of the last few years, but significant uncertainties persist regarding protectionist trends, the financial dynamic and geopolitical risks.