Weekly Report - 14 June 2012 (WR-12-23)

ARGENTINA/BRAZIL | Holding Latin America back. The World Bank (WB) decided to revise down its economic growth forecast for Latin America to 3.5% for 2012 and 4.1% for 2013 citing the observed slowdown in the Brazilian and Argentine economies. In its January Global Economic Prospects report its growth forecasts for the region were set at 3.6% in 2012 and 4.2% in 2013. However, the WB now believes that headwinds from Europe have caused a sharp decrease in the price of raw materials and the inflow of capital to the region, affecting South America’s largest economies. As a result of this it has revised down its growth forecasts for Brazil for the year from 3.4% to 2.9%, and for Argentina from 3.7% to 2.2%. This is in contrast to the majority of countries in the region for which the WB has either marginally decreased its forecast (Ecuador, Colombia, Chile and Panama) or has actually revised up its forecasts (Mexico, Bolivia, Venezuela and Costa Rica). In fact the growth rates forecast for Brazil and Argentina for 2012 are now not only much lower than the regional average but they are also lower than in all of the other countries mentioned above.

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