MercoPress. South Atlantic News Agency

Latam forecasted to expand 4.7% in 2008; Argentina 7%

Latin America's economy will grow at 4.7% in 2008 compared with 5.7% last year, the United Nations Latin American and Caribbean Economic Commission, CEPAL, estimated this week, reaffirming growth targets trimmed in March.

José Luis Machinea, head of CEPAL based in Santiago de Chile, told reporters he expects Brazil's gross domestic product to grow 4.8%, Mexico 2.7% and Argentina 7%. Machinea said it was unlikely the US subprime mortgage crisis would have a major impact in Latin America's financial markets, but warned the US slowdown would hit poorer countries and those reliant on exports to the US. "There will be a soft recession in the US, but we think the impact on Latin America won't be that big," Machinea said. According to CEPAL Chile's economy is set to grow 4.5% while Venezuela and Colombia are expected to expand at a 6% rate. Panama with 8% is set to lead the region's growth. Peru with 7% and Uruguay, 6.5% are forecasted to have a good year. Bolivia and Paraguay are estimated to expand 5% Machinea trimmed CEPAL previous forecasts in March, citing a likely soft recession in the United States, a slowdown in Europe and some impact in China. However the Latinamerican economy will remain solid given the strong demand and prices for commodities.