The WorldBank expects growth in Latin America and the Caribbean to rebound in 2017 onthe back of expected expansions in Brazil and Argentina.
In areport, the institution said it estimates the region's economy to further shrinkby 1.1% in 2016 as general growth stability in Mexico, Central America and theCaribbean is offset by recessions being experienced by their larger SouthAmerican neighbors. However, the trend is expected to be reversed in 2017 asthe World Bank sees the region posting a 1.8% expansion. Theorganization noted the region's favorable forecast is, nonetheless,"exposed to downside risks stemming from a turbulent and uncertain worldenvironment."
For Brazilalone, the World Bank expects a 3.2% contraction this year before growing 1.1%in 2017. The growth estimates are higher than the ones released in June, whichwere at -4.0% and -0.2%, respectively, DiárioComércio Indústria & Serviços reported.
Argentina,meanwhile, is seen to grow 3.2% next year, the organization said, adding thatas Argentina now allows its exchange rate to adjust flexibly, it must focus onfiscal adjustment. "By providing relief to monetary policy, the lattershould facilitate the fight against inflation and help promote private investment."
The WorldBank, however, advised that governments and companies in the region shouldstart seeking international trade markets as their own markets weaken amid aslowdown in the Chinese economy, ElEconomista reported.
Augusto dela Torre, World Bank's chief economist for Latin America and the Caribbean,said this is a "fundamental task" for the region which could takeseveral years and whose effectiveness would depend on the sustainability of therecovery of the economy in 2017. Thetrade switch will be essential despite a difficult environment because of thedecline in trade volumes as protectionist policy debates in the U.S. and otheradvanced economies intensify, de la Torre noted.