BUSAN, South Korea – Latin America will grow less than 2 percent in 2015 and expand once again at a slower clip than the previous year, the chief economist of the Inter-American Development Bank told Efe on Saturday.
“Short-term growth in Latin America is going to be poor. We’re going to have a growth rate below 2 percent” this year, Spaniard Jose Juan Ruiz said at the BEXCO Convention Center in this South Korean city, site of the four-day annual meeting of the boards of governors of the IDB and the Inter-American Investment Corporation, which ends Sunday.
The economist predicted that 2015 will mark the fourth consecutive year that the region’s GDP growth will be slower than the previous year.
In a previous forecast, the IDB projected that Latin America will grow 2.2 percent in 2015.
The weakness of the euro zone and Japan, the slowdown in China, and the decline in the price of raw materials are some of the factors he cited as reasons for the downwardly revised forecast.
The United States is “the exception” in terms of being the only economy in full recovery mode, Ruiz said.
“The good news is that this is not the start of a Latin American crisis because the region’s countries have significantly improved their macroeconomic position. There’s a better ability to respond, although not in all (countries),” the economist added.
“This time Latin America is not doing something different from the rest of the world. It’s not a Latin American crisis in a world that’s growing, but rather a decline in the region’s short-term growth in a world that appears trapped in low growth rates,” he added.
The more worrying issue is the region’s medium-term growth, which he said the IDB expects will remain at around 3 percent.
“Latin America is growing slowly, not because it’s creating too few jobs or investing too little. Its growth level is low because its level of productivity is low,” Ruiz said, insisting on the need for structural reforms, particularly in education.