SANTIAGO, Chile - LATIN America and the Caribbean will see strong economic growth in 2013 despite Europe's fiscal woes and a struggling US economy, the UN's regional economic body said on Tuesday.
The region is expected to expand by 3.8 per cent in 2013, mainly due to a recovery of Argentina and Brazil, and higher internal demand in several nations.
"This shows that the global economic crisis had a negative but not dramatic effect in the continent, which kept for most of the year a certain resilience to face shocks from abroad," Alicia Barcena, head of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), told reporters in Santiago.
The estimate for growth next year is slightly lower than ECLAC's previous forecast of four per cent.
A recession in Europe and sluggish growth in China and the US eroded the global economy in 2012 with dwindling world trade and output, ECLAC said in its latest report. Latin America was hit by slower growth in two of its regional powerhouses.
Argentina grew 2.2 per cent in 2012 versus a neck-breaking 8.9 per cent last year, while Brazil slowed down to 1.2 versus 2.7 per cent in 2011.
ECLAC expects Argentina to grow by 3.9 per cent next year. Brazil is set to expand by four per cent, mainly due to a recovery of industrial activity, internal consumption and a hike in exports.
Chile is expected to expand by 4.8 per cent and Peru by six per cent next year.
Regional economies, however, will remain largely dependent on world economic trends.
Europe's slow growth and even recession in some cases will continue in throughout 2013. "Although this might also give rise to agreements that could gradually lead to a resolution of the financial, fiscal and competition imbalances that are currently in place," ECLAC said.
The report also says the probability of a fiscal agreement in the US increased after the presidential elections. China will post a higher expansion this year or keep current levels, depending on how much the Asian giant lifts its internal demand, tames inflationary pressures and recovers its export growth.
The Caribbean economies, which grew 1.1 per cent as a whole in 2012, will remain fragile and will need reform with outside help.
"The challenge for Latin America and the Caribbean is still to increase and stabilize investment growth," Barcena said.
"Not to depend exclusively on consumption as a means of driving structural change with equality, incorporating technical progress and delivering sustainable growth."
Panama was the region's fastest growing regional economy in 2012 with a 10.5 per cent expansion, followed by Peru's 6.2 per cent, Chile's 5.5 per cent and Venezuela's 5.3 per cent.
ECLAC expects the region to close 2012 with a 3.1 per cent growth. That is higher than expected numbers for world expansion of 2.2 per cent but lower than the region's 4.3 per cent growth last year.