LatAm, Caribbean to see GDP dip by 0.6 pct in 2016: ECLAC

Latin America and the Caribbean will see their total GDP dip by 0.6 percent in 2016, said the Economic Commission for Latin America and the Caribbean (ECLAC) in a report released Saturday.

This is mainly attributed to low growth in developed economies and a slowdown in emerging countries, it said.

Other factors also include rising volatility on financial markets and low commodity prices.

According to ECLAC, continued weakness in internal demand from countries in the region will lead to a drop in domestic investment along with a decrease in consumption.

This new estimation by ECLAC is a marked drop from December 2015 when it said Latin America and the Caribbean would grow by 0.2 percent in 2016.

At the time, low commodity prices and declining investment were already cited as the reasons for this anemic growth. However, with economic outlooks not improving in the first quarter of the year, ECLAC is revising down its growth forecast.

The UN body believes that, much like 2015, the dynamics of growth in 2016 will vary between countries and regions.

For example, it estimates that South America, driven by the exports of raw materials, such as oil and minerals, will contract by 1.9 percent.

Caribbean economies, meanwhile, will suffer less with a drop of 0.6 percent, while Central American economies will grow 3.9 percent.

The report recommends more investment, higher productivity and long-term sustainable actions. Endi