Uso de cookies Utilizamos cookies propias y de terceros para mejorar nuestros servicios y mostrarle publicidad relacionada con sus preferencias mediante el análisis de sus hábitos de navegación. Si continúa navegando, consideramos que acepta su uso. Puede obtener más información sobre nuestra: Política de cookies

The global fashion business journal

22 May 201901:48

Latin America faces the ‘contagious’ effect: the powers of the region slow down in 2018

Of the four largest economies in the region, Colombia was the only one that improved its performance in the last year, while Mexico slowed down, Brazil stagnated and Argentina entered into recession.

01 Mar 2019 — 08:59
María Bertero
Share
Save

Latin America faces the ‘contagious’ effect: the powers of the region slow down in 2018

 

 

Latin America is infected by the restraint of the global growth. The region, diverse and agitated, closed 2018 in bad shape, with its main powers slowing down. Its exposure to international trade (now threaten by the trade war) and the political uncertainty affected the growth potential of several countries, which are also highly exposed to the current weaker development of global trade.

 

Actually, Colombia was the only Latin American economy that boosted its growth in the last year in comparison to 2017, while Argentina entered into recession once again.

In a context of global downturn, Latin America begins to show signs of exhaustion while seeking greater regional stability. In its latest forecasts, the International Monetary Fund (IMF) alerted that the growth in Latin America will be hit by the general weakening of the economy.

 

Of the four largest powers in the region, Colombia was the only one that accelerated its growth in 2018, raising its GDP by 2.7%, in line with the forecasts of the Colombian government and analysts. Last year’s growth is the highest since 2016, when the Colombian economy improved by 2%.

 

 

 

 

The economic improvement also had an impact on industry: in 2018, the Colombian manufacturing industry managed to get out of the recession, after registering a growth of 2%. The previous year, the sector reduced its activity by 1.8%, with fashion being one of the most harmed industries in this regard. The IMF predicted last January that the Colombian economy will grow by 3.3% in 2019.

 

Brazil, meanwhile, recorded a low growth in the last year, in full change of government after the victory of Jair Bolsonaro. The country, the largest consumer market in Latin America, grew 1.1% in 2018, in line with the previous year.

 

Brazil grew by only 1.1%, well below the forecasts set at the beginning of the year

The forecasts for Brazil at the beginning of 2018 considered a growth of 3%, but the truck drivers’ strike in May and the political uncertainty due to the election of a new president lowered the predictions for its economy. However, the IMF was more optimistic with the South American country and forecasted an increase of 2.5% for this year.

 

 

 

 

Another country that suffered the consequences of the elections was Mexico. The Mexican economy grew by 2% in 2018, a tenth less than in the previous year, when the country’s GDP grew by 2.1%. The IMF already warned at the beginning of the year about a downturn in the Mexican economy, which will grow by 2.1% this year.

 

In addition to the presidential elections, the uncertainty about the renegotiation of the North American Free Trade Agreement (NAFTA) also had an impact on the development of the Mexican economy during the last year.

 

Of the big four in Latin America, Argentina was the only one that entered into recession. After growing by 2.9% in 2017, the country closed again 2018 in the red, with a fall of 2.6%, registering its worst year since 2009. The intervention of the IMF and the inflation of almost 50% were the obstacles that the Argentinian economy had to face last year.

Advertising
Comment
Share
Participation rules

info@themds.com

 

Validation policy for comments: 

 
MDS does not perform prior verification for the publication of comments. However, to prevent anonymous comments from affecting the rights of third parties without the ability to reply, all comments require a valid email address, which won’t be visible or shared.
 
Enter your name and email address to be able to comment on this news: once you click on the link you will find within your verification email, your comment will be published.

0 comments — Be the first to comment
...