Region’s recovery could be faster than expected, U.N. says

Latin America and Caribbean countries could show 4.1 percent economic growth next year, in a faster-than-expected recovery from the global economic crisis, the United Nations´ regional economic agency said Thursday.

“The worst of the crisis is behind us,” Alicia Bárcena, executive secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), said in a statement. “The motors of growth have been turned on again, but we don´t know how long the fuel will last.”

Bárcena´s remarks came at the presentation of ECLAC´s Preliminary Overview of the Economies of Latin America and the Caribbean 2009.

Costa Rica´s economy could contract by 1.2 percent this year and expand in 2010 by 3.5 percent, slightly above the 3 percent increase estimated for next year in Central America overall, the report says. Although industry leaders are hopeful for whatever gains they can get, that rate is a far cry from this country´s 7.8 percent growth registered in 2007.

It likely will fare better than Nicaragua, whose economy is set to shrink 1.5 percent this year and then rebound next year to grow 2 percent, ECLAC predicts.

Neighboring Panama, however, will recover faster, seeing growth of as much as 4.5 percent, at the rate of nations like Chile and Bolivia.

This year could close with the region´s economies shrinking by an average of 1.8 percent, which means that gross domestic product per capita would fall about 2.9 percent, the ECLAC report suggests.

In a press release, the U.N. body stressed “the urgent need to redefine standards for production and trade specialization, to encourage innovation and include more know-how and diversification in products and seek new destination markets, with greater participation of Asian countries.”

Costa Rica expects to finalize a free trade agreement with China by the end of February that trade officials hope will open further commercial prospects in that country and draw further investment here.