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As the crisis worsens in Venezuela, the country where economic performance is the worst in Latin America, three other economies in the region are likely to end the year with sharp declines.
This is the case of Nicaragua, Argentina and Ecuador, who have shown signs that they will end the year 2018 in a complicated situation.
At the beginning of the year, few people thought that there would be a popular uprising in Nicaragua and that it would cause hundreds of deaths.
In Argentina, the good economic performance of the first quarter does not indicate that months later will occur a race against the local currency, the peso, and that the basic interest rate will reach 60% (in Brazil it is 6.5). %).
With regard to Ecuador, badysts worry about the high level of public debt.
Brazil, which in recent years has become accustomed to ranking the continent's poorest economies, escaped this time. According to the Economic Commission for Latin America and the Caribbean (ECLAC), the country is expected to grow by 1.6 percent in 2018, 0.1 percentage point higher than the average growth of the economy as a whole. from Latin America.
Nicaragua: Consequences of Social and Political Crisis
Photo: Inti Oco n / AFP
The social and political crisis in Nicaragua has left more than 300 dead and nearly 2,000 wounded, according to the Office of the UN High Commissioner for Human Rights.
The organization denounces extrajudicial executions, enforced disappearances and barriers to access to health care in a country facing mbad protests against President Daniel Ortega.
In the midst of the crisis, ECLAC anticipates a quest for economic growth, which is expected to rise from 4.9% in 2017 to 0.5% this year.
The conflict has had a profound impact on tourism, trade and agriculture, as well as exports and investment.
"If the weak growth persists and social tensions do not disappear, it is to be expected that social indicators will deteriorate," said Daniel Titelman, director of the BBC Development Division, at the Spanish service of the BBC From CEPAL.
But there is an important element in the local economy, namely the remittances of Nicaraguans abroad – the economist estimates that there will be no reduction in this volume, at least one factor positive in a country so convulsed.
Nicaragua accounts for 0.3% of Latin America's GDP and has a per capita GDP of US $ 2,217 last year (about R8,600). The country has 6.2 million inhabitants.
Argentina in emergency situation
Argentina, with 44.5 million euros Residents, has experienced dark days. the country is in an "emergency situation" and has announced an adjustment plan for reducing the number of ministries to less than half and a new imposition of taxes on agricultural exports.
The Argentine peso has lost 50% of its value against the dollar over the last year and the depreciation is expected to accelerate even more inflation, which has already exceeded 30%.
In addition, the interest rate reached 60%, something difficult to imagine in the first quarter, when things went as planned.
Macri seeks to reduce the budget deficit to convince investors that the country will repay its debt, one of the conditions agreed in connection with a $ 50 billion loan from the International Monetary Fund (IMF) (about R195 billion).
The government hoped to achieve a balanced budget by 2020 and advanced it to 2019, by imposing a hard-to-reach goal.
"Argentina has problems with low growth, high inflation and low credibility on the part of the markets.It's not easy to handle this situation," said Titelman, of CEPAL.
ECLAC predicts that the Argentinean economy, which grew 2.9 percent in 2017, declined by 0.3 percent this year.
The third largest economy in the region, Argentina accounts for 11.7% of its GDP and recorded a per capita GDP of 14,305 USD (about R $ 56,000) last year.
Ecuador and adjustment of public expenditure
It is precisely the size of the debt that is the most important. 39, one of the economic pressures that disrupt foreign badysts.
Another worrying aspect is the drop in investment from last year .0.5%, one of the factors that prompted the l 39; ECLP to predict u did 1.5% growth of the country's economy this year.
How did this decline occur in just 12 months? "The drivers that drove the economy in 2017 have weakened," says Titelman of ECLAC
In Ecuador, oil plays a very important role in economic development. and total oil production fell nearly 3.4% in 2017.
This situation, coupled with other uncertainties, such as the adjustment of spending encouraged by the government of Lenin Moreno, influenced the reduction of projections.
ECLAC estimates that consumption will decline as a result of a more restrictive monetary policy.
Ecuador is a heavily dollarized economy subject to external ups and downs. "When the dollar appreciates, it does not suit Ecuador because it loses its competitiveness," Titelman said.
And as the United States raises interest rates, new clouds could appear on the horizon. Faced with these challenges, the Ecuadorian government has relied on austerity measures aimed at reducing the deficit and public debt in order to increase collection.
The plan was announced last April and gave hope to international organizations and investors. Ecuador accounts for 1.9% of Latin America's economy and had a per capita GDP of US $ 6,199 last year (about R $ 24,000). The country has 16.8 million inhabitants.
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