Economic Growth in Latin America: Past, Present and Future Perspectives.Andrs SolimanoECLAC, United NationsNovember 11, 2004

Table of ContentsThe Recent Growth Performance of Latin AmericaThe Growth Record of Latin America of the Last Four DecadesVolatilityChanges in Growth PerformanceTowards Explaining Growth PerformanceFuture Prospects

A. The Recent Growth Performance of Latin America

Figure 1. THE ECONOMIES OF THE REGION GREW BY 1.5% OVERALL IN 2003. ECLAC PROJECTS A GROWTH RATE OF 4.5% IN 2004

Amrica Latina y el Caribe: 4,5%Figure 2. PROJECTED GROWTH RATE BY COUNTRY, 2004

Chart3

12

9.2

7.1

5.5

5

4.8

4.2

3.8

3.7

3.7

3.7

3.5

3.5

3.3

3

3

2.9

2.5

2

-1

-2

2004

Tasa porcentual de crecimiento anual

G-L1

5.14667446073.4463803432

2.24313356030.616892936

0.448695599-1.1200190595

3.73053541562.1428021341

0.3467225384-1.1604033472

-0.6308310095-2.0974392772

1.62524817380.1506279009

4.42.9745914963

&A

Page &P

PIB

PIB per cpita

AMRICA LATINA: TASAS DE CRECIMIENTO ANUAL

L1

Producto interno bruto total

(Millones de dlares a precios constantes de 1995)Tasa crecimiento

19891990199119921993199419951996199719981999200020012002200320042004 a/

Argentina184,015180,348199,554218,776231,637244,956237,949250,965271,081281,450271,945269,698257,729229,867249,865267,6067.1

Bolivia5,2455,4775,7735,8716,1206,4136,7157,0167,3577,7277,7517,9278,0578,2788,4858,7653.3

Brasil598,872571,293576,827575,232601,216638,662665,422681,910702,723703,979710,219738,102747,496758,853757,335785,3563.7

Chile47,95949,53353,15356,66662,96066,10472,03677,01082,20684,94684,54088,32491,43193,26996,392101,0194.8

Colombia68,02870,25077,18079,87783,20188,16892,50394,29597,42298,15394,43596,70998,05299,674103,402107,2283.7

Costa Rica8,7579,1039,24810,06410,78011,27711,71611,81212,45113,47914,55514,81814,99115,40716,27016,8723.7

Cuba54,85653,38246,51540,30332,99933,17934,07037,17238,17238,17840,36842,90044,14344,64845,80947,1833.0

Ecuador16,65717,14018,07518,72519,06919,77420,19620,80821,89722,36921,08621,27122,43123,28323,91225,2275.5

El Salvador6,8557,1847,3847,9238,4338,9379,4959,66310,07010,44810,79911,01911,21111,45211,68111,9152.0

Guatemala11,49111,84112,28312,88913,40913,96214,65615,09415,75816,56417,20217,78918,25318,64519,03719,6083.0

Hait3,9223,9373,9443,7283,4312,8283,0963,2693,3733,4703,5723,6453,6223,6153,6303,557-2.0

Honduras3,3503,3453,4353,6363,8943,8203,9604,1054,3084,4494,3844,6284,7534,8775,0335,2093.5

Mxico320,540336,889350,988364,047370,520386,962363,234383,005409,171430,151445,678475,679474,320477,641483,850502,2363.8

Nicaragua2,9102,9092,9102,9142,9043,0033,1833,3913,5263,6353,8864,0574,1824,2124,3094,4603.5

Panam5,6146,0556,6007,1427,5227,7577,9068,1188,4988,8929,2069,4489,4849,5569,94810,4455.0

Paraguay6,9477,1587,3377,4617,7627,9998,3558,4458,6488,5948,5888,5338,7378,5188,7408,9582.5

Per43,22640,87541,98241,81843,81949,40253,64354,98258,75358,40158,91060,51560,64663,59966,14368,9204.2

Repblica Dominicana10,3019,7399,83210,61610,93011,44211,93512,78913,83214,86016,05417,22917,74318,51118,43718,252-1.0

Uruguay14,51614,58615,14616,40716,99518,19817,76718,68619,69720,56219,85119,46518,76616,50516,91818,4749.2

Venezuela56,00859,38465,08469,38269,47267,37570,64270,65075,50375,95971,79374,50177,09170,15763,56271,18912.0

Subtotal 20 pases1,470,0681,460,4271,513,2491,553,4771,607,0751,690,2161,708,4801,773,1851,864,4451,906,2671,914,8211,986,2541,993,1411,980,5672,012,7562,102,481

Tasa de crecimiento PIB 20 paises-0.73.62.73.55.21.13.85.12.20.43.70.3-0.61.64.40

PIB per cpita3,4823,3963,4563,4863,5443,6643,6423,7183,8463,8703,8263,9083,8633,7823,7883,900

Tasa de crecimiento PIB per cpita 20 paises-2.51.80.91.73.4-0.62.13.40.6-1.12.1-1.2-2.10.23.0

Poblacin total

(Miles de habitantes)

Pas1989199019911992199319941995199619971998199920002001200220032004

Argentina32,08132,52732,97433,42133,86934,31834,76835,22035,67236,12536,57837,03237,48737,94438,40138,854

Bolivia6,5196,6696,8226,9807,1427,3097,4827,6627,8488,0398,2338,4288,6248,8249,0259,227

Brasil145,565148,030150,429152,770155,069157,343159,608161,860164,086166,296168,495170,693172,891175,084177,268179,443

Chile12,88313,10013,32013,54513,77113,99414,21014,41914,62214,82215,01815,21115,40215,58915,77415,956

Colombia34,28934,97035,66436,37037,08537,81038,54239,28540,04240,80441,56642,32143,07043,81744,56245,302

Costa Rica2,9983,0763,1533,2313,3113,3913,4753,5633,6543,7473,8383,9254,0084,0894,1674,245

Cuba10,53510,62810,70810,78010,84510,90610,96411,01911,06911,11511,15811,19911,23811,27311,30611,338

Ecuador10,02910,26410,50210,74110,98111,22111,46011,69811,93712,17512,41112,64612,87913,11213,34313,572

El Salvador5,0265,1105,2075,3165,4315,5505,6695,7875,9086,0316,1546,2766,3976,5186,6386,757

Guatemala8,5328,7498,9789,2159,4629,7159,97610,24410,51910,80211,09011,38511,68711,99512,30912,629

Hait6,7866,9427,0857,2207,3527,4847,6227,7647,9098,0568,2058,3578,5118,6688,8278,988

Honduras4,7344,8795,0285,1805,3365,4945,6545,8165,9816,1486,3166,4856,6566,8287,0017,174

Mxico81,66683,22684,80386,39187,98389,57191,14592,71294,27595,83097,36798,881100,373101,847103,301104,735

Nicaragua3,7293,8243,9324,0504,1744,3004,4264,5524,6794,8074,9385,0715,2085,3475,4895,631

Panam2,3512,4112,4612,5122,5642,6172,6702,7252,7802,8362,8922,9483,0043,0603,1163,172

Paraguay4,0954,2194,3404,4604,5804,7034,8284,9585,0895,2235,3595,4965,6365,7785,9226,068

Per21,31521,75322,18022,59723,00923,42123,83724,25824,68125,10425,52525,93926,34726,74927,14827,547

Repblica Dominicana6,9437,0667,1927,3187,4457,5737,7057,8397,9778,1168,2568,3968,5368,6778,8198,960

Uruguay3,0853,1063,1273,1493,1723,1953,2183,2423,2653,2893,3133,3373,3613,3853,4083,432

Venezuela19,02519,50219,97220,44120,91021,37721,84422,31122,77723,24223,70724,17024,63225,09325,56326,012

Amrica Latina422,185430,048437,875445,687453,492461,295469,104476,931484,770492,605500,421508,199515,948523,677531,388539,042

L2

Tasa de crecimiento anual2001-12001-22001-32001-42002-12002-22002-32002-42003-12003-22003-32003-42004-12004-22004-32004-4

199920002001200220032004AL PIB trimestral2.11.2-0.5-1.8-3.0-0.40.71.51.70.61.23.05.3

PIB Mundial3.24.01.31.82.73.8Promedio ao0.30.30.30.3-0.6-0.6-0.6-0.61.61.61.61.64.44.44.44.4

Estados Unidos4.13.80.32.42.94.5

Japn0.12.80.40.22.64.1

Unin Europea2.83.71.71.10.71.6

China7.187.589.17.5

L2

00

00

00

00

2003

2004

Tasas de crecimiento principales economas 2003-2004

L3

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

AL PIB trimestral

Promedio ao

L4

1990-19981999-20022003

Absorcin Interna3.90.10.8

Exportaciones Netas-0.50.90.8

PIB3.41.01.5

L4

00

00

00

Absorcin Interna

Exportaciones Netas

L6

China variacin 2003/2002

ExportacionesImportaciones

Total Mundial34.639.9

Asia29.942.4

EE UU y Canad32.123.9

Europa51.534.2

Oceana37.825.9

Africa46.354.1

Amrica Latina y el Caribe25.279.1

L6

00

00

00

00

00

00

00

Exportaciones

Importaciones

CHINA: CRECIMIENTO DE SUS EXPORTACIONES E IMPORTACIONES 2003/2002

L7

TotalTotal sin petrleoPetrleo y DerivadosAceites, harinas y semillas oleaginosasCaf promedioCobre

Jan-0278.870.489.664.528.766.1

Feb-0280.871.293.162.829.368.6

Mar-0292.473.2117.062.832.570.5

Apr-0298.873.1131.963.632.669.9

May-0298.073.2129.866.129.570.1

Jun-0298.174.3128.867.628.272.4

Jul-02102.074.6137.172.228.069.8

Aug-02103.773.4142.673.127.065.0

Sep-02107.675.6148.675.829.064.9

Oct-02106.676.1145.873.630.365.2

Nov-0299.575.9130.076.932.869.5

Dec-02106.377.9142.875.430.170.1

Jan-03118.278.3169.675.832.272.4

Feb-03122.578.8178.676.832.074.0

Mar-03116.777.4167.175.128.472.9

Apr-03103.476.3138.377.731.269.7

May-03104.176.4139.780.232.372.4

Jun-03107.875.8149.078.430.574.1

Jul-03110.176.3153.575.131.975.1

Aug-03114.277.3161.776.933.177.3

Sep-03107.879.0144.883.533.778.6

Oct-03113.582.9152.998.132.884.4

Nov-03116.086.9153.4103.733.190.3

Dec-03118.887.9158.5103.134.596.7

Jan-04127.093.8169.8108.638.5106.5

Feb-04127.697.7166.2111.139.8121.2

Mar-04135.5103.3176.9121.839.9132.2

Apr-04135.6103.4176.9117.338.2129.5

May-04143.5100.5198.7105.439.5120.1

Jun-04137.699.1187.193.441.8118.0

L7

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

Total

Total sin petrleo

Petrleo y Derivados

L8

Estados Unidos: Importaciones no petroleras

2000=100

TotalMexAm CentMercosurCan+Chile

Jan-0094.591.798.392.899.9

Feb-0096.295.099.097.996.9

Mar-0097.496.299.6101.098.3

Apr-0097.798.399.1100.199.1

May-0098.998.398.696.0100.8

Jun-00100.1100.0100.2101.0101.3

Jul-00101.4100.6100.7103.8100.9

Aug-00102.2102.7101.7109.0100.6

Sep-00103.1104.299.3103.599.8

Oct-00104.0105.1101.1100.2102.1

Nov-00103.5105.1101.997.0101.3

Dec-00101.1102.7100.597.698.9

Jan-01102.4103.3101.9105.4100.8

Feb-01100.6101.399.3107.098.5

Mar-01100.9101.9100.5109.2102.0

Apr-0197.2100.097.8102.998.2

May-0196.6100.398.1103.2100.4

Jun-0195.3100.297.399.698.8

Jul-0194.7100.295.999.698.7

Aug-0193.8100.294.798.898.7

Sep-0192.197.992.1101.998.4

Oct-0192.497.592.0103.095.0

Nov-0191.996.792.5104.892.3

Dec-0190.797.292.0101.790.4

Jan-0290.597.692.3101.194.7

Feb-0291.397.490.698.394.8

Mar-0292.396.991.098.293.9

Apr-0293.499.492.3100.894.9

May-0294.7101.094.5102.697.3

Jun-0297.3102.297.4107.2101.8

Jul-0298.3101.199.1109.798.9

Aug-0298.4100.8100.6112.5100.9

Sep-0299.2101.3103.3114.4100.5

Oct-0297.9100.7103.8121.5103.8

Nov-0298.6101.0104.5122.0102.2

Dec-0299.2101.3104.2124.2105.8

Jan-03101.5100.8108.2119.5103.2

Feb-03101.1100.1108.9123.3104.3

Mar-0399.698.6109.5125.6105.4

Apr-0399.199.3108.7125.9110.4

May-0399.698.9108.8122.5112.6

Jun-03101.399.4107.2120.3111.9

Jul-03102.198.8104.9121.5112.1

Aug-03100.597.3102.6122.8114.0

Sep-03102.098.8105.1121.9115.7

Oct-03102.999.9105.2123.1116.4

Nov-03105.4102.1105.3124.7115.1

Dec-03106.5105.2107.9128.7117.1

Jan-04106.9105.6107.9126.5115.2

Feb-04109.6107.6113.3124.4120.1

Mar-04111.5107.4112.6122.1127.6

Apr-04114.0110.1114.3125.9134.9

L8

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

Total

Mex

Am Cent

IMPORTACIONES NO PETROLERAS DE ESTADOS UNIDOS

L9

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

Total

Mercosur

Can+Chile

L10

TASA DE CRECIMIENTO de exportaciones intrabloque

Comercio Intrarregional

19901991199219931994199519961997199819992000200120022003I-2003I-2004

Comunidad Andina26.334.819.836.529.728.2-118.2-2.2-28.431.19.5-6.7-5.5-14.816.4

Mercosur7.623.64139.919.717.820.320.3-1.1-25.416.8-13.6-33.324.511.531.4

Mercado Comn Centroamericano8.930.132.55.816.520.2-12.912.424.63.430.18.2-0.7810.117.2

Caricom2.9-10.11.115.924.226.53.911.55.76.312.312.4-12.714

Amrica Latina y el Caribe8.21119.91923.223.617.712.4-5.2-14.429-6.3-9.913.75.316.2

CAN10.19.1

Mercour11.411.9

MCCA28.126.9

CARICOM18.918.8

Amrica Latina y Caribe15.216

L10

000

000

000

000

000

2002

I-2003

I-2004

L11

Tasas de crecimiento anuales

1994199519961997199819992000200120022003

Exportaciones16.121.812.111.3-1.15.619.8-4.10.84.4

Importaciones181211.418.46.1-3.716.1-2.5-6.70.8

Cuadro II.3

AMRICA LATINA Y EL CARIBE: EXPORTACIONES E IMPORTACIONES DE BIENES

(Tasas anuales de variacin)

200220032004a

Exporta-Importa-Exporta-Importa-Exporta-Importa-

cionescionescionescionescionesciones

TOTAL1.3-6.98.53.219.914.7

MXICO1.50.22.51.110.610.4

MERCOSUR1.2-25.519.110.523.229.1

Argentina-3.1-55.814.354.414.573.6

Brasil3.7-15.021.12.225.517.6

Paraguay-1.7-14.621.717.953.053.3

Uruguay-10.2-35.718.311.627.527.3

COMUNIDAD ANDINA Y CHILE0.8-7.98.02.041.918.2

Bolivia1.110.921.1-7.343.1-6.8

Chile-0.5-3.115.813.341.616.1

Colombia-3.7-1.69.99.88.88.1

Ecuador8.719.619.21.29.513.7

Per9.92.716.411.332.08.0

Venezuela-0.0-29.1-3.4-21.477.555.6

CENTROAMRICA Y EL CARIBE3.33.310.52.63.13.2

Costa Rica6.813.816.610.91.13.1

El Salvador4.51.44.711.1-0.13.8

Guatemala-1.412.68.16.69.612.8

Hait-10.1-7.121.413.8

Honduras2.01.55.39.114.424.3

Nicaragua-5.8-0.29.86.3

Panam-11.3-5.0-5.0-3.3

Repblica Dominicana-2.10.75.3-10.8-0.6-14.4

L12

AMRICA LATINA Y EL CARIBE: TRMINOS DEL INTERCAMBIO

(Variacin porcentual acumulada 1998-2002 y variacin 2003)

relacin trminos del intercambio

1998-20022003

Venezuela26.77.8

Ecuador4.73.4

Mxico3.71.0

PETROLEROS b/3.62.5

Colombia2.72.9

Repblica Dominicana0.9-1.0

Argentina-1.78.6

AMRICA LATINA Y EL CARIBE-3.41.1

Panam-4.0-4.4

Bolivia-4.96.8

Hait-6.9-1.4

Costa Rica-7.5-1.5

Uruguay-10.12.4

Guatemala-13.4-2.9

Honduras-14.6-4.3

NO PETROLEROS-14.80.5

Brasil-15.3-0.5

El Salvador-15.5-3.9

Paraguay-15.81.0

Nicaragua-16.8-3.4

Chile-17.54.9

Per-22.73.8

L12

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

1998-2002

2003

L13

CtaCte/PIB

20022003

Venezuela7.811.3

Argentina9.46.1

Repblica Dominicana3.75.0

Paraguay1.32.6

Brasil1.70.8

Uruguay2.60.7

A.LATINA Y CARIBE0.90.3

Bolivia4.50.2

Chile1.30.8

Mxico2.21.5

Ecuador5.41.6

Per2.01.8

Colombia2.01.8

Panam0.83.4

Honduras3.33.7

Guatemala5.34.3

El Salvador2.94.9

Costa Rica5.75.5

L13

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

2002

2003

L14

AMERICA LATINA Y CARIBE: Balanza de pagos en millones de dolares

199519961997199819992000200120022003

Balanza de renta-40,760-42,711-47,666-51,389-50,487-53,503-54,588-51,367-56,619

Transferencias corrientes ( remesas)15,16814,70415,23516,84219,20620,44224,95328,03434,298

AMERICA LATINA Y CARIBE: Como % del PIB

Balanza de renta-2.4-2.4-2.6-2.7-2.6-2.7-2.7-2.6-2.8

Transferencias corrientes ( remesas)0.90.80.80.91.01.01.31.41.7

L14

00

00

00

00

00

00

00

00

00

Balanza de renta

Transferencias corrientes ( remesas)

L21

IED netaEntrada de capitales (exc. compensatorios)

19810.904.25

19820.850.44

19830.76-3.39

19840.59-1.54

19850.86-2.35

19860.54-1.76

19870.47-1.74

19880.86-2.33

19890.74-1.99

19900.62-0.46

19910.962.11

19920.983.89

19930.764.98

19941.562.66

19951.561.80

19962.233.75

19972.884.23

19983.033.54

19994.502.84

20003.543.16

20013.731.92

20022.40-0.87

20031.670.28

20041.81

L21

00

00

00

00

00

00

00

00

FLUJOS DE CAPITALES: 1997-2004 ( Como % del PIB)

Sheet2

COSTOS DE LAS EMISIONES DE BONOSEMISIONES DE BONOS

CostoCosto(excluido Argentina)PlazoRendimientos bonos Estados UnidosMonto mensualPromedio mvil 12 meses

1997-I9.2714.46.56Jan-004,1703,621

1997-II9.7813.66.70Feb-005,2033,737

1997-III9.1017.76.24Mar-005,6833,667

1997-IV10.067.65.91Apr-009703,159

1998-I9.377.65.59May-001,5722,970

1998-II9.8810.15.60Jun-006,2393,226

1998-III12.878.45.20Jul-007,0053,545

1998-IV11.937.74.67Aug-003,6973,723

1999-I12.338.84.98Sep-002,7643,777

1999-II11.686.85.54Oct-001,7083,663

1999-III12.105.05.88Nov-002843,432

1999-IV11.334.76.14Dec-008603,346

2000-I11.1611.46.48Jan-016,2703,521

2000-II11.696.96.18Feb-013,9773,419

2000-III11.729.35.89Mar-012,9303,190

2000-IV12.506.15.57Apr-014,5973,492

2001-I11.7810.207.95.05May-014,3753,725

2001-II12.5510.508.05.27Jun-012,2303,391

2001-III14.3410.7011.04.98Jul-011,6202,943

2001-IV15.5010.509.74.77Aug-014,7203,028

2002-I10.307.75.08Sep-011,3002,906

2002-II11.207.25.10Oct-018502,834

2002-III13.808.14.26Nov-011,8802,967

2002-IV12.7015.24.01Dec-013,4303,181

2003-I12.748.23.92Jan-023,5802,957

2003-II10.318.23.62Feb-023,5002,918

2003-III10.619.14.23Mar-021,8002,823

2003-IV9.869.54.29Apr-022,9402,685

2004-I9.4114.34.02May-021502,333

2004-II10.546.54.55Jun-027102,207

2004-IIIJul-021,2702,178

2004-IVAug-021301,795

Sep-025901,736

Oct-024501,703

Nov-023901,578

Dec-023,9901,625

Jan-035,7601,807

Feb-032,2001,698

Mar-033,1701,813

Apr-034,7601,964

May-031,6512,089

Jun-034,4002,397

Jul-033,9902,623

Aug-032,0602,784

Sep-032,7902,968

Oct-035,8203,415

Nov-032,8803,623

Dec-033,6703,596

Jan-047,2903,723

Feb-042,0503,711

Mar-042,2303,633

Apr-041,8303,388

May-045303,295

Jun-042,3003,120

Sheet2

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

&A

Page &P

Monto mensual

Promedio mvil 12 meses

L18

Tasa crecimiento

2004

Venezuela12.0

Uruguay9.2

Argentina7.1

Ecuador5.5

Panam5.0

Chile4.8

Per4.2

Mxico3.8

Costa Rica3.7

Colombia3.7

Brasil3.7

Nicaragua3.5

Honduras3.5

Bolivia3.3

Guatemala3.0

Cuba3.0

REGIN EL CARIBE2.9

Paraguay2.5

El Salvador2.0

R. Dominicana-1.0

Hait-2.0

L18

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

2004

L15

Promedio ponderado

Tasa de desempleoTasa de ocupacin

19907.253.2

19958.552.9

19989.952.4938965505

199910.551.7678332775

20001052.3817604115

20019.851.9659356712

200210.651.5865127499

200310.552.0300640346

L15

00

00

00

00

00

00

00

00

&A

Page &P

Tasa de desempleo

Tasa de ocupacin

Ahorro nacionalAhorro externo

199020.50.621.1

199118.91.920.8

199217.82.920.7

199317.33.620.9

199417.93.521.4

199518.92.321.2

199619.02.221.2

199719.03.422.4

199817.64.422.0

199917.13.120.2

200018.42.420.8

200117.02.819.8

200218.10.718.8

200318.2-0.417.8

00

00

00

00

00

00

00

00

00

00

00

00

00

00

Ahorro nacional

Ahorro externo

resultado primario del GCResultado global

2003200420032004

Nicaragua2.80.9A. Latina y Caribe-2.7-1.8

Brasil2.62.5Argentina0.30.6

Mxico2.42.7Bolivia-7.1-6.8

Argentina2.22.2Brasil-1.0-1.0

Ecuador2.21.3Chile-0.41.6

Venezuela1.93.0Colombia-4.9-4.8

Uruguay1.13.2Costa Rica-3.1n/d

Paraguay1.01.5Ecuador-0.9-1.8

A. Latina y Caribe0.31.0Guatemala-2.3-3.9

Per0.20.7Honduras-5.9-2.9

Chile0.12.1Mxico-0.6-0.3

Colombia-0.4-0.5Nicaragua-2.3-1.2

Guatemala-1.1-2.3Paraguay-0.30.2

R.Dominicana-2.02.5Per-1.8-1.4

Honduras-3.5-1.5R. Dominicana-3.80.7

Bolivia-4.2-3.9Uruguay-4.6-3.4

Venezuela-4.1-3.0

Figure 3. PER CAPITA OUTPUT IN 2004 (1997 = 100)

1990-19971998-2003Rate of Growth (% per year) GDP3.21.3 GDP per capita1.4-0.2Gross Capital Formation (% of GDP)22.419.3National Savings(% of GDP)19.617.8Foreign Savings(% of GDP)2.91.5Source: Preliminary overview of the economies of Latin America andCaribbean, ECLAC 2003.Savings, Investment and GrowthLatin America and the Caribbean, 1990-2003.Table 1

B. The Growth Record of Latin America of the Last Four Decades

Economic Growth in Latin America 1960-2004Four stylized facts of economic growth in L.A. that define risks and prospects of growth

Economic growth has been slow and very volatile.

High heterogeneity in degree of development across Latin American countries.

Economic growth has declined since early 1980s.

Important changes in relative growth performance, including the economic collapse of some countries. Few cases of rapid and sustained growth after 1990.

11nov2004

Table 2

Table 2

Average annual GDP

Growth rates (%)

1960-20021960-19801981-20022000-20032004 (p)20002001200220032004

Argentina0.92.6-0.6-1.97.1-0.8-4.4-10.88.67.1

Bolivia1.02.3-0.32.33.32.31.62.72.43.3

Brazil2.24.60.11.73.74.01.51.5-0.43.7

Chile2.51.63.23.24.84.23.22.03.34.8

Colombia1.82.60.92.33.72.51.51.63.73.7

C. Rica2.03.10.93.13.71.81.22.86.43.7

Ecuador2.05.4-0.23.25.50.95.53.82.55.5

Mexico2.13.70.62.03.96.8-0.50.61.23.9

Peru0.71.8-0.23.04.22.5-0.15.44.14.2

Rep. Dom.3.24.73.03.5-1.07.33.04.3-0.5-1.0

Uruguay0.81.50.1-3.89.5-1.9-3.5-12.02.39.5

Venezuela0.11.6-1.3-2.812.03.83.5-9.0-9.312.0

Unweighted Average1.63.00.51.35.0

Source: own elaboration based on data from ECLAC.

(p) Projected by ECLAC.

1.63.00.5

Sheet1

Key Macroeconomic Indicators in select countries of Latin America

200320042005200620072008

Real GDP Growth (%)

Argentina8.76.04.13.73.43.8

Brazil-0.22.83.22.93.02.9

Chile3.34.55.04.74.74.5

Colombia3.73.83.53.53.53.5

Ecuador2.74.33.83.13.63.1

Mexico1.33.03.03.33.63.5

Peru4.04.13.93.84.14.5

Venezuela-9.28.43.13.93.63.5

Average1.84.63.73.63.73.7

Consumer Price Inflation (Av;%)

Argentina13.45.46.13.43.33.0

Brazil14.75.84.13.43.03.0

Chile2.80.52.62.82.92.6

Colombia7.16.15.14.44.03.8

Ecuador7.94.42.92.21.91.7

Mexico4.53.83.11.61.81.3

Peru2.33.43.02.82.52.2

Venezuela31.124.120.116.414.913.3

Average10.56.75.94.64.33.9

Budget Balance (% GDP)

Argentina0.50.50.80.3-0.20.2

Brazil-8.9-2.0-1.4-2.4-2.0-1.4

Chile-0.80.50.2-0.3-0.5-0.4

Colombia-5.0-4.7-4.5-4.5-4.3-4.1

Ecuador1.12.32.21.40.4-0.2

Mexico-0.7-0.5-1.2-1.7-1.8-2.0

Peru-2.0-1.5-1.3-1.3-1.1-0.8

Venezuela-5.9-6.5-2.4-2.3-3.6-3.3

Average-2.7-1.5-1.0-1.4-1.6-1.5

Current Account Balance (% of GDP)

Argentina6.12.12.72.22.42.4

Brazil0.7-0.3-1.7-1.6-1.4-1.1

Chile-0.81.3-0.7-1.0-1.6-1.9

Colombia-1.8-2.3-2.7-2.7-2.7-2.7

Ecuador-0.40.80.40.51.31.3

Mexico-1.5-1.8-2.0-1.4-1.3-1.4

Peru-1.8-1.3-2.0-1.7-1.4-1.2

Venezuela11.39.34.32.52.30.7

Average1.51.0-0.2-0.4-0.3-0.5

Short Term Lending Rate (Av,%)

3.78.011.010.010.09.5

23.415.413.512.012.012.0

Chile6.27.010.511.09.59.5

7.89.910.810.810.510.0

12.412.015.017.017.016.0

6.87.69.811.712.011.5

Peru14.215.816.918.518.418.0

25.227.533.526.525.524.5

Average12.512.915.114.714.413.9

[1] Money-market rate

[2] Overnight repo rate on federal securities

[3] 90-day deposit rate

[4] Deposit banks' prime lending rate

[5] 90-day Treasury-bill rate

[6] Commercial banks' prime rate

Source: Country Forecast April (2004) .The Economist Intelligence Unit Limited.

Sheet2

Table 2

Average annual GDP

Growth rates (%)

1960-20021960-19801981-20022000-200320002001200220032004

Argentina0.92.6-0.6-1.9-0.8-4.4-10.88.67.1

Bolivia1.02.3-0.32.32.31.62.72.43.3

Brazil2.24.60.11.74.01.51.5-0.43.7

Chile2.51.63.23.24.23.22.03.34.8

Colombia1.82.60.92.32.51.51.63.73.7

C. Rica2.03.10.93.11.81.22.86.43.7

Rep. Dom.3.24.73.03.57.33.04.3-0.5-1.0

Ecuador2.05.4-0.23.20.95.53.82.55.5

Mexico2.13.70.62.06.8-0.50.61.23.9

Peru0.71.8-0.23.02.5-0.15.44.14.2

Uruguay0.81.50.1-3.8-1.9-3.5-12.02.39.5

Venezuela0.11.6-1.3-2.83.83.5-9.0-9.312.0

Unweighted Average1.63.00.5

Source: own elaboration based on data from ECLAC.

1.63.00.5

Sheet3

C. Volatility

Economic growth has been slow and volatileAverage annual growth rate of per capita GDP in 1960-2002Latin America: 1.6% per capita100 to 192US: 2.5%100 to 275South Korea: 6%100 to 990

Instability: years with recessions (negative GDP growth)Average for Latin American countries: 16 of 42US: 8 of 42South Korea: 4 of 42

Frequency of Growth Crisis: Unstable Growth1960-19801981-20021961-2002Argentina6111741.5Bolivia4101434.1Brazil391229.3Chile63922.0Colombia07717.1Costa Rica281024.4Dom. Republic44819.5Ecuador281024.4Mexico08819.5Peru5101536.6Uruguay691536.6Venezuela6121843.9Average3.78.311.929.3Korea2137.3Thailand0224.9Philippines07717.1Ireland1237.3Spain2249.8Turkey561126.8Average1.73.3512.3Source: Own elaboration based on ECLAC and IMF data.Number of years with negative GDP growth ratesLatin American CountriesControl groupPercentage of crisis in total periodGrowth Crisis in Latin America and Control GroupTable 4

D. Changes in Growth Performance

Changes in Growth Performance Across Countries in Latin American Economies

Cumulative Contribution ofContribution of growth in per Total Factor Capital and Laborcapita GDPProductivityBolivia1965-1973Brazil 1971-1980Chile1986-1997Colombia 1968-1974Costa Rica 1965-1974Dom. Republic 951.12922.11992-2000Ecuador1972-1980Mexico 1963-1970Korea1963-1971967.742.125.61982-19911056.535.926.6Ireland1994-2001Spain1961-1974Thailand1986-1996Table 6Growth Booms in Latin America and Other Countries11124.554.769.814112.481.940.5864.539.634.9833.5258.3953.640.123.51041.92318.9724.9204.91191.15546.51067.732.535.2934.836.7-1.9Sustained growthper-capita GDP growth rates above 2 per year for 6 continuous years or moreLength of the cycle in years

Country and Per capitaNational External InvestmentTerm ofGrowth BoomsGross DomesticSavingFinancingTradeNational External InvestmentTerm ofPeriod*Product(Index 1995=100)SavingFinancingTrade(annual growth rate)(Index 1995=100)Bolivia1965-733.313.83.016.8138.510.16.016.1108.9Brazil1971-805.517.94.122.189.415.91.417.490.2Chile1986-975.319.13.222.392.54.89.013.9145.9Colombia1968-743.813.73.016.797.115.22.617.797.1Costa Rica1965-744.110.68.819.472.412.33.816.174.1Dominican Rep.1992-20004.618.63.522.199.022.02.724.8129.7Ecuador1972-803.917.74.121.8188.69.57.316.8105.6Mexico1963-703.816.51.818.3182.113.41.014.4187.4Source: Economic Survey of Latin America of ECLAC (various), IFC(2002) and Maddison(2003).* per capita GDP growth rates above 2 per year for 6 continuous years or more.(Percentages of Gross Domestic Product)(Percentages of Gross Domestic Product)Memo (average of four years before)Table 7Anatomy of Growth Booms

E. Towards Explaining Growth Performance

Why so different development paths?Analysis of sources of economic growthPhysical capital accumulation: high and neutralHuman capital accumulation: low and neutralTechnology adoption and use (TFP): main determinant

TFP accounts formost of the evolution of per-capita GDP in each countrythe decline in growth after 1980, avg. TFP growth is 0%.changes in performance for collapses: Venezuela -1.3% per year since 1980stagnations: Mexico -0.3%per year since 1980booms: Chile 3.5%per year since 1980

South Korea: 3.7% per year since 1960

Table 8 Growth Accounting for Latin American Economies

Country1960-19801981-20021990-20021960-20021960-19801981-20021990-20021960-2002Argentina4.20.82.22.41.8-0.31.20.7Bolivia4.72.03.53.32.2-0.80.30.6Brazil7.21.81.84.32.0-1.1-0.50.4Chile3.54.75.84.11.31.52.41.4Colombia5.32.92.54.11.80.30.41.0Costa Rica6.23.74.74.91.40.11.20.7Dominican Republic7.34.96.35.63.41.02.61.7Ecuador8.42.12.24.64.8-1.3-1.21.2Mexico6.82.53.04.52.1-0.8-0.30.6Peru4.61.83.93.11.1-1.31.1-0.1Uruguay2.20.81.41.51.10.71.30.9Venezuela5.11.01.33.00.3-1.3-1.0-0.5Latin America Simple average 5.52.43.23.81.9-0.30.60.7Weighted average6.12.12.54.01.9-0.70.00.5Source: Andrs Solimano and Reimundo Soto (2003)."Latin American Economic Growth in the Late Twentieh Century: Evidence and Interpretation", ECLAC, mimeo.Average annual GDP growth rates (%)Average annual rate of growth of TFP (%)Table 10Latin America. Rate of Growth of GDP and Total Factor Productivity Growth (TFP)

TFP growth is policy determined

F. Future Prospects

Prospects

GDP Growth: boom (4% avg. in 2004 and in 2005)Interest rates:lowest in 50 yearsInflation:low (for LA standards) and stableExports:high and growingTerms of Trade: high, especially oil producersCapital Flows:timid and selective comeback

RisksSlowdown in China and East AsiaRising interest rates in US and ChinaAppreciating exchange rates in LAInternal political shocks

Long run factorsEducationProductivity and technologyInfrastructureLess bureaucracy and lower transaction costsPoverty, inequality and political stability

Economic Growth in Latin America: Past, Present and Future Perspectives.Andrs SolimanoECLAC, United NationsNovember 11, 2004