World Bank's Chief Economist for Latin America and the Caribbean Augusto de la Torre said that the Latin American economy will grow between 5.5 and 6% this year spurred mostly by a good performance from Mercosur members.
De la Torre added that the regional economy expansion will smooth by 2011 though exporter countries will benefit from the high prices of commodities.
We are being more cautious for next year's figures as we only see a growth that will float between 4 and 5”, said de la Torre during a visit to Chile.
He also admitted growth in the region has been more robust than the one forecasted at the beginning of this year when just a 4% expansion was expected and warned about the need to take advantage of the situation investing in infrastructure, education and health services.
The strongest regional countries in terms of forecasted economy expansion are Brazil, Argentina, and Uruguay (Mercosur full members) and Peru, which all are within an estimated growth rate of between 7 and 8%
Likewise, De la Torre, said that Latin American economies had received a boost from its natural resources and prices as they currently prevail on the commodities market, but that the region should not squander this opportunity to save for when times become lean. He went on to add that many of these countries should use this new found wealth to create more equitable societies.
Commenting on the World Bank's publication, 'Natural Resources in Latin America and the Caribbean: Beyond Booms and Busts?' Augusto de la Torre said: The speed of the recovery in Latin America and its resilience in the face of the global economic crisis can certainly be attributed partly to the growth in importance of the region's commodity exports to emerging Asian economies.
Thus, assuming demand for soy exports from Argentina, iron ore from Brazil, copper from Chile, fish and minerals from Peru and other Latin American commodities keeps up, the region is in a strong position to profit from its natural resources.”
Over 97% of the region's GDP is produced in net commodity-exporting countries and 93% of its population lives in countries that benefit from high commodity prices.
According to a latest World Bank Report, in Latin America there has been a substantial shift from exporting commodities to advanced economies to trading with emerging economies like China. For example, the United States' share as a destination market declined from 44% in 1990 to 37% in 2008 -the latest year for which data is available, while China's share rose over tenfold during the same period, from 0.8% to 10% of total commodity exports.
China is Brazil's most important market for commodity exports, accounting for almost a fifth of total commodity exports in 2008. China is also a leading trade associate of Chile, Argentina, Uruguay and Peru.