SANTIAGO, Chile (CMC) — The Economic Commission for Latin America and the Caribbean (ECLAC) has updated its economic activity growth projections for the region this year, keeping its estimate for average regional expansion at 2.2 per cent, after growing 1.2 per cent last year.

It said that this regional projection is the same as what was published in December 2017, when ECLAC released its annual report Preliminary Overview of the Economies of Latin America and the Caribbean 2017.

As in previous years, during 2018 growth will show heterogeneous dynamics between countries and sub regions, ECLAC said noting that for the English and Dutch-speaking Caribbean, average growth is projected at 1.4 per cent for 2018, above the 0.1 per cent recorded in 2017.

According to ECLAC, economic activity projections for Latin America and the Caribbean are being made in a more favourable international context than that of the last few years, but significant uncertainties persist regarding protectionist trends, the financial dynamic and geopolitical risks. ECLAC said during 2018, greater dynamism in external demand is seen helping stimulate the economic activity of Latin America and the Caribbean.

Likewise, domestic demand will play an important role in the acceleration of growth, although with differences among components, ECLAC indicates. In particular, and even while continuing to be low, investment is expected to make a greater contribution than in previous years, while private consumption will remain a relevant driver of domestic demand, it said.

ECLAC said that in some cases, the rise in real wages and the expansion of credit, along with growth in remittances, in the case of the Central American region, are factors that explain the increase in consumption.

With regard to public spending, ECLAC indicates that fiscal consolidation is expected to remain on average during 2018, meaning that public investment and spending will make a lower contribution to growth.