Latin America Real GDP Performance and Forecast, Q4 2008

Fourth Quarter 2008

Latin America Real GDP Performance and Forecast

Regional Growth Prospects Continue to Deteriorate

Real annual GDP growth in Latin America was 4.4 percent in 2008, a deceleration from prior years, but still historically strong. However, the high commodity prices that helped prop up growth in 2008 have retreated, leading to forecasts of a substantial slowdown in 2009.

The regional economy is expected to decelerate markedly to 2 percent in 2009, the slowest pace in six years. Argentina, Venezuela, and Peru are forecast to experience the most notable slowdowns, with growth falling 4–5 percentage points this year.

Surging fuel and food prices in the first half of 2008 pushed Latin American inflation to 8.6 percent in 2008, according to the Latin Focus Consensus Forecast. In 2009 however, a combination of slowing demand and falling commodity prices is likely to contain inflation pressures somewhat, with the forecast at 8.2 percent.

Real GDP Performance and Forecast
  2006 2007 2008 2009 2010
Argentina 8.5 8.7 6.4 1.3 2.4
Bolivia 4.7 4.6 5.7 4.0 3.9
Brazil 3.7 5.5 5.4 2.7 3.8
Chile 4.3 5.1 4.1 2.4 3.5
Colombia 6.8 7.7 3.4 2.7 3.8
Costa Rica 8.8 7.1 3.5 2.7 3.6
Cuba 12.0 7.3 4.5 4.5 4.9
Dominican Republic 10.7 8.5 4.7 2.3 6.6
Ecuador 3.9 2.5 4.9 2.1 2.9
El Salvador 4.2 4.7 3.0 2.2 2.7
Guatemala 5.3 5.7 4.2 3.1 3.9
Honduras 6.3 6.3 4.1 3.0 3.3
Jamaica 2.5 1.3 0.1 –0.4 1.4
Mexico 4.8 3.2 1.8 0.4 2.7
Nicaragua 3.9 3.8 3.0 2.8 3.5
Panama 8.7 11.5 8.4 5.7 5.9
Paraguay 4.3 6.8 5.5 3.2 4.0
Peru 7.7 8.9 9.2 5.6 6.3
Uruguay 7.0 7.4 9.0 4.1 4.0
Venezuela 10.3 8.5 5.2 0.7 –1.7
Total 5.4 5.5 4.4 2.0 3.2

Source: IMF, Consensus Economics, Latin Focus, JP Morgan, EIU