Latin American economy to grow by five percent in 2010

Geneva, Sep 15 (IANS/EFE) The Latin American economy will grow by around five percent this year and in some countries in the region the increase could exceed six percent, the UN Conference on Trade and Development (UNCTAD) has said.

The recovery in the gross domestic product (GDP) predicted for the region will be “more moderate” in Central America and the Caribbean, the UNCTAD said in its report.

Contributing to this trend, the study said, is the “rather radical” reorientation of the macroeconomic policies followed in the region after the Asian financial crisis of the late 1990s and the 2001-02 Argentine debt crisis.

Then, the governments of the Latin American countries embarked upon monetary and exchange rate policies oriented toward maintaining international competitiveness, the report said.

In several countries tax revenues have increased, providing those governments with additional resources that could be spent on infrastructure and social transfers.

The UNCTAD also noted that measures such as increase in the minimum wages, reactivation of collective negotiating entities and the launch of public works programmes have improved employment in the region.

Between 1980 and 2002, per capita GDP in Latin America remained relatively stagnant while at the same time unemployment was rising and productivity was falling due to lack of investment, the report said.

–IANS/EFE