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Weekly Report - 12 August 2003

Another 'lost six years' for Latin America

Economic growth will only reach 1.5% this year instead of the expected 2.1%. Per capita GDP remains lower than six years ago.  

The economy of Latin America and the Caribbean will grow 1.5% in 2003, `recovering modestly' from a 0.6% fall in 2002, while per capita GDP will remain flat this year, at a level 2% lower than in 1997, completing the region's sixth `lost year', according to the preliminary version of Eclac's annual Economic Survey of Latin America and the Caribbean 2002-2003, released last week.  

The study says that 2003 will be better than last year in terms of growth, employment, financial conditions and external accounts - although 2002 is a poor basis for comparison. For this year, Eclac forecasts a flattening of growth due to the lack of either a powerful drive from the world economy or strong domestic reactivation. The external engine is absent, the US is not growing as forecast, the European countries have turned in a surprisingly poor performance, and Japan remains stagnant.  

As usual, performance varies considerably from one country to the next:  

* Argentina will head the growth ranking (5.5%) although its per capita GDP will be 17% lower than in 1997. Venezuela will post the lowest growth rate (-13%), despite a significant recovery that began in the second quarter.  

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