Ibero-America meets in an economic context of low growth and doubts
The XXVI Ibero-American Summit to be held on November 15 and 16 in Antigua, Guatemala, is part of an economic context of low growth in Latin America, concern for Argentina, Venezuela and Brazil, and consolidation of the recovery in Spain and Portugal.
Latin America will close 2018 with a growth of 1.2%, one tenth less than what was registered in 2017, and will expand in 2019 at a rate of 2.2%, according to the International Monetary Fund (IMF), which at the beginning of October lowered your projections for the region.
The Economic Commission for Latin America and the Caribbean (ECLAC) also recently revised its forecasts downward, and predicted that the region will grow 1.3% this year and 1.8% in 2019, driven by a rebound in demand internal and a slight increase in investment.
The adjustments of the agencies respond mainly to the concern about the crisis in Argentina, caused by the strong exchange rate instability that broke out at the end of April and that led the Government to request a loan from the IMF of 57,100 million dollars.
The Argentine economy will contract 2.6% this year and 1.6% by 2019, as the IMF points out in its latest report "Global Economic Perspectives." ECLAC is more pessimistic and calculates a fall of the Argentine GDP for 2018 of 2.8%.
Brazil, the largest economy in Latin America, is also a cause for unrest, although it is expected to grow 1.4% this year. The South American giant does not finish overcoming the effects of the severe crisis of 2015 and 2016 and maintains still worrying unemployment rates and a runaway fiscal deficit, according to analysts.
Venezuela, for its part, continues to concentrate the economic bad omens of the region, with an estimated contraction for 2018 of up to 18 percent, according to the IMF.
Who will also join the list of countries with economic difficulties this year is Nicaragua, whose GDP will fall by 4% due to the socio-political crisis that began last April.
But the economic expectations of Latin America are very heterogeneous and there are countries that will maintain high growth rates despite regional and international avatars.
The countries that will grow the most this year are the Dominican Republic (5.6%), Panama (4.8%) and Paraguay (4.6%), according to ECLAC. To a lesser extent, Bolivia (4.3%), Peru (3.9%), Chile (3.9%), Colombia (2.7%), Mexico (2.2%), Uruguay (1.9%) will do so. %), Ecuador (1%), the Caribbean islands and the rest of the Central American countries.
Spain, for its part, strengthens its recovery and is at the head of the growth of the major economies of the euro zone, above Germany, France or the United Kingdom. The body that runs Christine Lagarde estimates that the Spanish GDP will expand by 2.7% in 2018 and 2.2% in 2019.
Neighboring Portugal also comes out well off the IMF's analysis and its economy is expected to recover this year's levels from a decade ago, before the financial crisis erupted. The projections suggest that the Portuguese country will grow 2.3% at the end of 2018.
Despite the stagnation of Latin American growth, concerns about Brazil and Argentina, and the climate of uncertainty generated by the tensions between the United States and China, trade between Latin America and the Iberian Peninsula, especially Spain, is going through a good time.
Spain is the gateway to Europe for Latin America, while Latin American countries are a gateway to the United States.
Last year, Spain exported goods and services to Latin America for more than 15,257 million dollars, 12.7% more than in 2016, and imported 16,999 million euros, representing an increase of 25% over the previous period, according to the Spanish Ministry of Economy and Business.
As member states of the European Union (EU), Spain and Portugal enjoy the trade agreements signed with countries such as Chile and Mexico and the current treaties with economic blocs such as Central America or the Colombia-Peru-Ecuador axis.
The EU also faces the final stage of negotiations for the signing of a free trade agreement with Mercosur (Brazil, Argentina, Paraguay and Uruguay).
European companies, especially Spanish ones, also represent a very important source of investment for Latin America. In 2017, Europe consolidated its position as the largest investor in the region and contributed 42% of the investments, followed by the United States with 28%, according to ECLAC data.
The UN agency warned last July that foreign direct investment (FDI) in Latin America fell in 2017 for the third year in a row and stood at 161.673 billion dollars due to the uncertainty generated by protectionist currents and the decline of prices of raw materials, which reduce the attractiveness of the extractive industry.