Latin American and Caribbean Exports Increase
By El Dinero
After four-consecutive years of contraction, exports from Latin America and the Caribbean are once again on the rise. In the first quarter of 2017, the value of total exports grew 17% in the interannual measurement after declining to an annual rate of 2.9% in 2016. The recovery was mainly due to a rebound in basic product prices, according to a study by the Inter-American Development Bank (BID by its Spanish acronym), which includes detailed data for 25 countries within the region.
According to the 2016 updated Estimated Trends in Latin America & the Caribbean annual report, regional exports’ performance was similar to that of world trade, while the accumulated recovery in the first months of 2017 was more intense.
“The changing trend in exports is excellent news for Latin America and the Caribbean. However, at the current juncture, trade expansion determinants, which are still fragile and not widespread in all countries within the region, should not be overestimated,” said Paolo Giordano, study coordinator & chief economist for the Integration & Trade Sector.
Countries with a high participation of energy and mineral products in their external supply achieved the greatest increases due to the recovery in basic product markets. Meanwhile, volumes exported by the region registered only a slight 2.2% acceleration and were still concentrated in a few economies.
South American countries showed the most pronounced recovery with a 23% average increase. This group includes Venezuela with 75%, Peru with 39%, Ecuador 34%, Colombia 31% and Brazil with 24%. The Mesoamerican subregion (Mexico and Central America) and the Caribbean recorded increases of 11% and 12%, respectively.
Current data from the Dominican Republic is not available, according to the statistical table released by BID, which nevertheless indicates 2.3% growth for the country between 2015 and 2016.
The return to export growth brings to a close the longest trade recession in the region’s recent history, which lasted 24 months. Even with this improvement, the exported value is 10% below 2014’s relative maximum. A strengthening of this incipient yet unstable trend requires a clearer reversal of some uncertainty factors present in the global economy.
The real growth of China, the United States and the European Union could sustain the recovery of regional exports in upcoming quarters. However, initiatives aimed at promoting competitiveness and regional integration should be stepped up and the risks of adopting protectionist trade policies should be eliminated.