The United Nations Economic Commission on Latin America and the Caribbean lowered its 2013 growth projection to 3 percent in a report released on Wednesday. The organization adjusted its expectations down from its 3.5 percent growth estimate last April due in part to slowing demand from China and the stubborn Eurozone crisis.
ECLAC highlighted slowing growth in Brazil and Mexico as one of the primary reasons for the lowered expectations in the region, along with slowing growth and diminished foreign investment in once booming economies like Panama and Chile.
The region’s commodity export-driven success has slowed dramatically under falling demand from the Eurozone. Countries like Argentina, Brazil, Colombia and Peru, all major exporters of raw materials including soy beans, minerals and oil, have seen expected exports drop to 4 percent compared to 20 percent growth in 2010 and 2011.
ECLAC recommended a greater push towards diversifying the regional economy away from raw material exports, which tend to follow a boom-bust cycle, and consumption-based growth.
The report described the region’s growth since the Lost Decade of the 1980s as “uneven and unstable.”
The report noted that Central America, a net importer of food and fuel, could see improved trade conditions as prices fall in response to decreased demand from China and Europe.
Tourism is slightly down in the Americas, reflected by recent news of lower than normal occupancy rates in Costa Rica, according to the National Tourism Chamber. Occupancy rates are down 12 percent from last year.
Central America reported an overall 1.3 percent drop in tourism.
While traveling for pleasure has been down, migrating for work is up. Positive economic conditions in Costa Rica and the United States contributed to increased remittances to Nicaragua, which reported $994 million in money sent from abroad in 2012.
Unemployment in Latin America and the Caribbean was slightly down from 6.9 percent to 6.7.
The U.N. organization noted that the developing world will continue to be the engine behind the global economy in the coming years as developed countries, including the Eurozone continue to falter.
Global economic growth in 2012 was 2.3 percent.