Venezuela and Argentina are forecasted to top economic performance in the region in 2007, above 6% growth, with Chile, Colombia, Panama, Peru and Dominican Republic following at levels ranging 5%, according to a top World Bank official.
Chief economist for Latinamerica, Guillermo Perry in an article for Latin Business Chronicle anticipates that Brazil and Mexico will probably move "in the range of a 3.5% expansion", the worst performance in the region. However some of the forecasts of Mr. Perry differ from those advanced by the IMF. Regarding Venezuela the IMF anticipates 3.7% expansion in 2007 following 17.9% in 2004; 9.3% in 2005 and 7.5% in 2006. Perry coincides with IMF forecasts for Argentina, 6% and Mexico, 3.5%, but not regarding Brazil, which the Washington based multilateral institution anticipates 4%. As to the region, Perry agrees with the IMF that 2007 will signal the fourth year of continuous growth although at a slighter pace, 4.5% than the last three at 5%. According to IMF the region expanded 2.2% in 2003; 5.7% in 2004; 4.5% in 2005; 4.8% in 2006 and forecasts 4.2% in 2007. However Perry points out that expansion rates in the long run will much depend on how the different countries of the region take advantage of the current bonanza to cut vulnerabilities and advance in structural reforms. "Most countries continue to progress in that area although at a slower pace than desired", pointed out Perry. "Major exceptions to this trend could come from Argentina, Venezuela and Bolivia, where current policies could be planting the seeds of future difficulties", added the World Bank economist. According to IMF, Bolivia is expected to end 2006 with a 3.9% expansion rate, below the expected 4.1%. Argentina has experienced a formidable economic development since 2003 with a strong 8.8% growth, ending a four year recession. IMF forecasts Argentina's expansion in 2006 to be 6%, two points less than in 2005. Perry anticipates that Chile, Colombia, Panama, Peru and Dominican Republic will be growing above 5% in 2007, while the IMF forecasts 5.5%, 4%, 6.1%, 5% and 5% respectively. Perry also points out that most Latinamerican countries begin 2007 with a significant reduction in the public debt/GDP ratio plus longer maturity periods and a more diversified composition of foreign debt which now also includes local currencies. Net inflow of foreign capital to the region is below the average of the early nineties but this responds to less financial needs, prudent public and private sectors management which make most countries far less vulnerable than in the past in the event of a reversion of that inflow".