May 2006 Financial News

Barbados economic growth keeping pace with the rest of the region

May 18, 2006

BARBADOS' economic growth in 2006 will be along similar lines to those of its partners in the Caribbean and Latin American. According to the United Nations body, the Economic Commission for Latin America and the Caribbean (ECLAC), the economies in the region are expected to grow by 4.6 per cent this year, up slightly from last year's performance.

It also said growth next year was expected to slow a little, to around four per cent for most of the region. At the outset ECLAC said countries in this part of the hemisphere would maintain last year's economic growth amidst favourable international conditions.

The organisation, in its Latin America and the Caribbean: Projections 2006-2007, stated, "On going favourable international conditions will favour growth in 2006. Strong world trade, led by the Asian economies, has kept commodity prices high. These conditions, combined with active domestic demand, will remain the main drivers behind Latin America's growth."

It estimated that inflation would remain sim ilar to 2005 levels of five per cent to seven per cent throughout the region. These historic lows were expected in a context in which energy prices would remain high.

"In 2006, growth rates for Latin American countries will range from three per cent to six per cent, except for Argentina and Venezuela, which will grow by more than six per cent.

As in previous years, the Southern Cone (Argentina, Chile, Paraguay, Uruguay) and the Andean Community posted the most growth, at 6.9 per cent and 5.7 per cen t, respectively," it stated.

"Argentina, with growth expected to reach 7.5 per cent in 2005, will lead in the Southern Cone, thanks to strong domestic demand, especially from investment. In Brazil, lower interest rates, reflecting less restrictive moneta ry policy, should stimulate a significant response from domestic demand, taking growth to 3.5 per cent," added the organisation.

The Barbados Advocate
Wenesday, May 17, 2006.
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