Latin America Real GDP Performance and Forecast, Q1 2008

First Quarter 2008

Latin America Real GDP Performance and Forecast

The pace of economic growth in Latin America is forecast to be the slowest since 2003 this year, largely attributable to the downward effects from slower growth in the United States. However, the outlook remains resilient as the region benefits from strong domestic demand.

Expectations for 2008 real GDP growth in the region were revised down 0.1 percentage points to 4.3 percent since the end of last year. Regional growth is projected to remain relatively steady through 2009 at 4.2 percent as an acceleration in Mexico's economic growth partially offsets slowdowns in Argentina and Venezuela.

Looking back, 2007's economic performance was revised up 0.3 percentage points to 5.3 percent on the back of greater than expected regional growth, most notably in Brazil, Mexico, and Argentina.

Consumer price inflation will remain an issue for the region this year, increasing to 6.2 percent from 5.7 percent in 2007, according to the Latin Focus Consensus Forecast. Higher energy and food prices continue to push up CPI in the region, with price growth in Venezuela and Argentina projected to be 25.4 and 10.9 percent, respectively, in 2008.

Real GDP Performance and Forecast
2002 2003 2004 2005 2006 2007 2008 2009
Argentina –10.9 8.8 9.0 9.2 8.5 8.4 6.1 4.6
Bolivia 2.5 2.7 4.2 4.0 4.6 4.0 4.4 4.3
Brazil 2.7 1.2 5.7 3.1 3.7 5.1 4.4 4.2
Chile 2.2 4.0 6.0 5.7 4.0 5.3 4.4 4.9
Colombia 1.9 3.9 4.9

4.7

6.8 6.8 5.0 4.8
Costa Rica 2.9 6.4 4.3 5.9 8.8 6.4 4.6 4.8
Cuba 1.5 2.9 4.4 9.0 12.0 6.5 6.1 5.1
Dom. Republic 4.3 0.5 1.2 9.5 10.7 7.9 4.9 4.3
Ecuador 4.2 3.6 8.0 6.0 3.9 2.1 2.6 2.2
El Salvador 2.3 2.3 1.8 2.8 4.2 4.2 2.9 2.5
Guatemala 3.9 2.5 3.2 3.5 5.0 5.2 3.6 3.5
Honduras 2.7 3.5 5.0 4.0 6.0 6.1 3.3 4.0
Jamaica 1.1 2.3 1.0 1.4 2.5 1.3 1.7 2.4
Mexico 0.8 1.4 4.2 2.8 4.8 3.2 2.6 3.7
Nicaragua 0.8 2.5 6.6 3.1 3.7 3.6 3.4 3.1
Panama 2.2 4.2 7.5 7.2 8.7 9.2 7.8 7.3
Paraguay 0.0 3.8 4.1 2.9 4.3 5.4 4.1 3.9
Peru 5.2 3.9 5.2 6.5 8.0 8.5 6.6 6.4
Uruguay –11.0 2.2 11.8 6.6 7.0 6.5 4.3 3.9
Venezuela –8.9 –7.8 18.3 10.3 10.3 8.6 5.6 3.8
Total 0.5 1.9 6.0 4.4 5.4 5.3 4.1 4.2

Source: International Monetary Fund, Consensus Economics, Latin Focus, JP Morgan, and the Economist Intelligence Unit.

Annual percent change

The data presented here represent the average of available forecasts. Individual country forecasts are weighted by GDP to produce the average for the region.