|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.