Thursday, January 22, 2015

Latin American Economies in 2015

Latin American growth will be slow (regional growth of 1.25%) in 2015, in large part because of a drop in commodity prices. From the IMF:



Oil prices in particular will hit Venezuela very hard, but also Bolivia, Ecuador and Colombia. The rest of the region will actually benefit. That's true of Central America, which is also so closely tied to the United States (along with Mexico) that it'll benefit from the U.S. recovery.

I've written about commodities a million times. You'll hear plenty of blather about ideology, market policies, trade, etc. but when push comes to shove, Latin American economic growth sits on commodities. Last October Ernesto Samper gave a speech about industrialization and in my opinion this needs to gain more traction. Venezuela is tanking for a number of reasons, but the core problem is almost total dependence on oil.

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