Latin America Real GDP Performance and Forecast, Q2 2008

Second Quarter 2008

Latin America Real GDP Performance and Forecast

Against the backdrop of a subdued outlook for global growth, Latin America is forecast to grow 4.4 percent this year, the slowest pace since 2003. However, the outlook remains resilient as the region continues to benefit from strong domestic demand and high commodity prices. Expectations for 2008 real GDP growth in the region were revised up 0.1 percentage points since the first quarter.

Regional growth is projected to moderate slightly in 2009, averaging 3.9 percent, as an acceleration in Mexico's economy only partially offsets slowdowns in Argentina, Brazil, and Venezuela.

Consumer price inflation will remain a concern for the region this year, with price growth averaging 7.1 percent, up from 5.9 percent in 2007, according to the Latin Focus Consensus Forecast. Higher energy and food prices continue to push up CPI in the region, particularly in Venezuela and Argentina, where the pace of inflation is likely to be well into the double digits this year.

Real GDP Performance and Forecast
2002 2003 2004 2005 2006 2007 2008 2009
Argentina –10.9 8.8 9.0 9.2 8.5 8.7 6.7 4.3
Bolivia 2.5 2.7 4.2 4.5 4.7 4.4 4.5 4.4
Brazil 2.7 1.2 5.7 3.1 3.7 5.4 4.6 4.1
Chile 2.2 4.0 6.0 5.6 4.3 5.1 4.0 4.2
Colombia 1.9 3.9 4.9

4.7

6.8 7.3 5.1 4.8
Costa Rica 2.9 6.4 4.3 5.9 8.8 6.8 4.0 4.1
Cuba 1.5 2.9 4.4 9.0 12.0 6.5 6.4 5.1
Dominican Republic 4.3 0.5 1.2 9.3 10.7 8.4 4.9 4.0
Ecuador 4.2 3.6 8.0 6.0 3.9 2.0 2.6 2.9
El Salvador 2.3 2.3 1.8 2.8 4.2 4.7 3.1 3.1
Guatemala 3.9 2.5 3.2 3.3 5.3 5.7 4.4 4.0
Honduras 2.7 3.5 5.0 6.1 6.3 6.3 4.4 4.1
Jamaica 1.1 2.3 1.0 1.4 2.5 1.3 2.3 2.4
Mexico 0.8 1.4 4.2 2.8 4.8 3.3 2.4 3.1
Nicaragua 0.8 2.5 6.6 4.3 3.9 3.8 3.5 3.3
Panama 2.2 4.2 7.5 7.2 8.7 10.8 7.9 7.1
Paraguay 0.0 3.8 4.1 2.9 4.3 5.9 4.2 4.1
Peru 5.2 3.9 5.2 6.5 7.7 9.0 7.5 6.3
Uruguay –11.0 2.2 11.8 6.6 7.0 7.1 5.3 3.9
Venezuela –8.9 –7.8 18.3 10.3 10.3 8.4 5.0 3.7
Total 0.5 1.9 6.0 4.5 5.4 5.5 4.4 3.9

Source: International Monetary Fund, Consensus Economics, Latin Focus, JPMorgan, 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.