Softness in the prices of gold, oil and alumina have hurt Suriname's budget. A lack of spending discipline has done a lot more damage. With elections due in 2015, the government has little appetite for hard decisions. However, a major financial crisis appears unlikely. At first glance, Suriname's US$5.27bn economy looks to be in good shape, as chart 1 indicates. According to latest (October 2014) IMF forecasts, real annual GDP growth should slow to a little under 3.3% this year, before rising to 3.8% in 2015 and 4%-5% over the subsequent four years to 2019. Thanks in part to the…
In recent months Jamaica’s government has made considerable progress, with a broadly based program of fiscal (and other) reforms. This success has been recognised by the International Monetary Fund (IMF). Nevertheless, significant risks remain. In mid-October, the IMF held a high level conference, ‘Unlocking Growth in the Caribbean’, in partnership with the government of Jamaica, at Montego Bay on 23-24 October. This follows a similar conference held in the Bahamas last year, involving regional prime ministers, finance ministers and central bank governors, as well as officials from the IMF, the World Bank, the Inter American Development Bank (IADB) and the…
Argentina's economy has been in recession for much of 2014 and will likely remain so for some time. The country's financial situation, although challenging, is such that the various actors can continue to 'muddle through', avoiding a major crisis. However, the potential deterioration of the labour market could produce some social tensions in the run up to the general election in October next year. Although the identities of the senior officials have changed over time, the administration led by President Cristina Fernández has followed a consistent and unorthodox economic policy. Domestic demand (and the needs of political stakeholders) have been…
Incumbent Dilma Rousseff of the ruling left-wing Partido dos Trabalhadores (PT) won the second round of the Brazilian presidential race on 26 October. Stripping away the claims and counter-claims of a bitterly fought election campaign, how serious are the economic problems she must now face? The daunting news for the re-elected president of Latin America’s largest economy is that there will be no quick solutions to Brazil’s economic malaise. Since 2008, the medium term economic growth rate (i.e. the average GDP growth over the preceding five years) has been trending down, from 4.8% to an estimated 2.8% this year. In…
Uruguay’s general elections were held on 26 October, with a second round ballot due on 30 November and the new administration due to take office on 15 March 2015. After ten years of economically successful centre-left rule, the new president might be forgiven for thinking that economic policy is a non-issue. Our suggestion: don’t take the economy for granted, worry about inflation, and watch out for the impatient middle classes. Uruguay can be presented as a model case for the benefits of moderate left-wing economic policy. After ten years of rule under the leftist Frente Amplio coalition, it has the…
On 12 October President Evo Morales won a resounding election victory, taking 61% of the vote to secure a third term in office, starting in January 2015 and running to January 2020. Most analysts agree that the country’s exceptionally strong economic performance was a key factor underpinning the popularity of this left-wing but pragmatic leader, a representative of the traditionally impoverished Aymara indigenous community (which makes up about two-thirds of Bolivia’s 10m-strong population). The Morales government now has to beware of complacency and start planning for the day the country’s natural gas boom may come to an end. While Morales…