New estimates from the Economic Commission for Latin America and the Caribbean (ECLAC) revealed that the value of the region’s exports in 2016 will fall for a fourth straight year and contract 5%.
According to the organization, the reduction in the demand for the products and the growing uncertainty are two key factors that led to these results. However, the indicators did not drop as much as last year. The exports in 2015 fell 15% and imports this year will be reduced 9.4% in comparison with last year, which is similar to 2015 figures (-10%).
Similarly, the reduction in intraregional trade is estimated at -10%, with an especially negative trade dynamic among South American economies.
The ECLAC assures in its annual report Latin America and the Caribbean in the World Economy 2016, that the region’s dynamic in global exports of goods and services remain stable around 6% in the last 15 years, and even lost ground in sectors such as high-tech goods and business, financial and telecommunications services.
The estimates for the period 2017-2020 remains positive, with a modest recovery of an average annual rate of around 3% both for exports (2.9%) and imports (3.1%).
Among the recommendations, the report urges that the region’s countries advance with diversification, integration and continue with the mechanisms to facilitate commerce.
“We must diversify the productive structure of Latin America and the Caribbean to drive economic recovery. We must continue betting on diversification, on value chains, on production chains as the foundation and on intraregional integration, which are more necessary than ever,” Alicia Bárcena, Executive Secretary of ECLAC, said in Santiago, Chile.
The ECLAC also recommended applying industrial and commercial policies that are consistent with the technological revolution and an environmental big push.