The European financial crisis, a sluggish U.S. economy, and the slowdown in China are all expected to take a toll on Latin American and Caribbean economies in 2012, according to a new report.
The growth of regional economies will slow to 3.7 percent this year, compared to a growth rate of 4.3 percent in 2011, the Economic Commission for Latin America and the Caribbean reported.
But the small economies of the Caribbean are expected to fare worse with overall growth of just 1.9 percent expected this year.
The report, which was released at ECLAC headquarters in Santiago, Chile this week, predicted the Cuban economy would grow at 3 percent, ahead of the Bahamas (2.8 percent) and Jamaica (1 percent).
The Haitian economy, which is still recovering from the 2010 earthquake, is expected to growth by 6 percent.
There are a few bright spots for the region: inflation, which reached 7 percent in December 2011, was tamed to 5.5 percent by April; remittances from the United States are up, internal demand is increasing and trade has remained one of the buoyant sectors.
Economic growth in Brazil, South Florida’s top trading partner, is pegged at 2.7 percent, the same as last year but far below 2010’s vibrant 7.5 percent growth.
Economic growth for other leading South Florida trade partners was estimated to be: Colombia (4.5 percent), Venezuela (5 percent), Costa Rica (5 percent), Dominican Republic (4.5 percent), Chile (4.9 percent), Honduras (3.2 percent), Mexico (4 percent), Peru (5.7 percent) and Argentina (3.5 percent).
Negative growth was expected in only one Latin American country: Paraguay where the economy is expected to contract -1.5 percent.
Growth was expected to be most brisk in Panama (8 percent), Peru and Haiti.
But the report didn’t rule out the possibility of a more adverse economic scenario for the region. If the global financial situation worsens, it said that could halt financial inflows to the region and suspend bank credit lines abroad. That, in turn, could lead to stock market declines, currency depreciation and a fall in exports and investment, ECLAC said.