MEXICO CITY – The value of exports from Latin America and the Caribbean will fall by 14 percent this year as a result of plunging commodity prices and reduced international demand, the UN Economic Commission for Latin America and the Caribbean, or ECLAC, said Tuesday.
The worst declines will be experienced by the region’s top exporters of fossil fuels: Venezuela, 41 percent; Bolivia, 30 percent; Colombia, 29 percent; and Ecuador, 25 percent.
With the prices of the area’s main exports tumbling 15 percent, volume will grow by only 1 percent, ECLAC Executive Secretary Alicia Barcena said as the report was released in Mexico City.
The drop in the value of exports is no longer “a circumstantial phenomenon” and the situation could worsen “if there are not deeper changes,” she said.
Between 2012 and 2015 the region “had its worst export performance in eight decades,” with a median annual decline of 5.8 percent, Barcena said.
ECLAC also forecasts a 21 percent contraction in trade among Latin American and Caribbean nations.
Mexico and Central America will fare better than the rest of the region this year, with a 4 percent drop in the value of exports, due to greater dynamism in the U.S., their chief foreign market.
International trade has yet to fully recover from the 2008-2009 financial crisis, ECLAC said.
This slowdown is “very worrisome” Barcena said, identifying “excess liquidity and lack of aggregate demand” as the main causes and advocating a “global pact to get out of this trap.”