MercoPress. South Atlantic News Agency

Strong 2004/05 recovery in Latinamerica.

Latinamerica and the Caribbean strong economic recovery will continue rolling for the rest of the year with the region's GDP expanding 4%, well above the 1,5% of last year, according to a report from the United Nations Economic Commission for Europe, UNECE.

Strong prices and demand for commodities, particularly metals, are playing a decisive role. Demand comes mainly from China, Asian countries and the United States.

Other factors involved are inter-regional trade, increase in domestic demand and growing confidence from consumers and the private sector.

Competitive exchange rates and improved risk ratings favored a boom in exports with the first current account surplus for the region in almost three decades.

However the report also points to vulnerabilities such as abrupt changes in the international scene and the evolution of interest rates which have a direct impact in credit demand for the region.

The UNECE reports identifies Asia as the most dynamic region of 2004 with GDP expanding at an annual rate of 6,5%, based on an exports boom, recovery of the world economy and China. Asian countries have taken advantage of low interest rates, expansive fiscal policies and competitive stability for the exchange rate.

A further report form the JP Morgan investment bank indicates that Chile, Peru and Argentina are forecasted to become the fastest growing economies of the region in 2005.

JP Morgan estimates that the Chilean economy will expand 5% in 2004 and next year will maintain a healthy 4,8%. Peru is expected to expand 4,5% in 2005, followed by Argentina, Colombia and Mexico all above 4%.