Latin Amer­ica, Caribbean reg­is­ter high­est ex­ports in six years

Jamaica Gleaner - - BUSINESS - [email protected]­ – CMC

THE IN­TER-AMER­I­CAN De­vel­op­ment Bank (IDB) says ex­ports from Latin Amer­ica and the Caribbean, in­clud­ing Ja­maica, hit their high­est level in six years as a re­sult of a 9.9 per cent in­crease in 2018, al­beit amid grow­ing down­side risks in the fu­ture.

A new IDB re­port noted that the re­gion ex­ported US$1.08 tril­lion last year.

Ex­ports from Ja­maica in­creased 17.6 per cent year-onyear in the first quar­ter of 2018 af­ter grow­ing 9.0 per cent on av­er­age in 2017, said the re­port. It noted that the stronger ex­pan­sion was due to in­creased ex­ports of raw ma­te­ri­als (ex­clud­ing fuel) and ma­chin­ery and trans­porta­tion equip­ment.

“While this is the high­est level since record ex­ports in 2012, the rise fell short of the 12.2 per cent growth rate for 2017,” said the IDB, re­fer­ring to the re­gion in gen­eral. “The re­gion’s per­for­mance also lagged a world­wide trade in­crease of 11.6 per cent for the Jan­uary-Septem­ber pe­riod com­pared to the same pe­riod the pre­vi­ous year,” it added.

Mex­ico and the Caribbean re­gion were above-av­er­age re­gional ex­port per­form­ers, with South Amer­ica lag­ging, ac­cord­ing to the lat­est ver­sion of the se­ries Trade Trends and Es­ti­mates: Latin Amer­ica and the Caribbean, which an­a­lysed the re­gion’s trade per­for­mance as well as its main sub­re­gions and coun­tries.

The IDB re­port noted that a de­cline in min­eral and agri­cul­tural prod­uct prices hurt ex­port per­for­mance, which was only par­tially off­set by higher oil prices.

“The evo­lu­tion of ex­ports from Latin Amer­ica and the Caribbean con­tin­ued to be pos­i­tive,” said Paolo Gior­dano, prin­ci­pal econ­o­mist of the In­te­gra­tion and Trade Sec­tor at the IDB and the study’s co­or­di­na­tor. “How­ever, there is a slow­down trend tak­ing place in the con­text of grow­ing ex­ter­nal risks that could weaken the ex­port per­for­mance in the fu­ture,” he added.

The re­port noted that risk fac­tors in­clude a slow­down of the world econ­omy, higher in­ter­na­tional in­ter­est rates, greater fi­nan­cial un­cer­tainty, and more trade ten­sions in­volv­ing ma­jor global play­ers.

China con­tin­ued to be an im­por­tant driver of ex­port growth for the re­gion. Ship­ments to the Asian gi­ant rose 24.2 per cent in 2018, above the in­crease in sales to the United States (8.6 per cent in­crease) and in­ter­re­gional ex­ports (7.8 per cent). Sales to the European Union rose an av­er­age 10.6 per cent for the year but flat­tened sharply in the sec­ond half of the year.

Among the sub­re­gions, ex­ports from the Caribbean climbed 22.4 per cent in 2018. South Amer­ica saw its ex­ports rise 8.9 per cent – a sharp de­cline from the 15.1 per cent in­crease reg­is­tered in 2017. Cen­tral Amer­ica, Mex­ico, and the Do­mini­can Repub­lic chalked up an es­ti­mated in­crease of 10.6 per cent.

The IDB noted that last year re­versed a trend of ris­ing com­mod­ity prices that weigh heav­ily in the re­gion’s ex­port port­fo­lio. Down­ward pres­sure in com­mod­ity mar­kets was driven by spe­cific fac­tors and, mainly, by a stronger dol­lar.

Cop­per saw its price drop 6.1 per cent in the Jan­uaryNovem­ber pe­riod when com­pared to the same pe­riod in the pre­vi­ous year. Soy dropped 4.3 per cent in the same time­frame, cof­fee dropped 16.4 per cent, and sugar fell back 23.4 per cent.

Ex­port vol­umes, which had risen by an av­er­age of 4.7 per cent in 2017, fell back sig­nif­i­cantly in 2018, with an es­ti­mated in­crease of just two per cent, ac­cord­ing to avail­able data for nine coun­tries in Latin Amer­ica and the Caribbean.

Mex­ico and Chile were the only coun­tries in the re­gion that ex­pe­ri­enced im­prove­ments in real ex­port per­for­mance. In Mex­ico, ex­port vol­ume growth in­creased from eight per cent in 2017 to nine per cent in 2018. Chile re­versed a two per cent de­cline in 2017 with a seven per cent vol­ume boost in 2018.

The Es­ti­mates sis­ter pub­li­ca­tion – Trade and In­te­gra­tion Mon­i­tor – pub­lished in Novem­ber, in­cludes rec­om­men­da­tions to im­prove Latin Amer­i­can ex­port com­pet­i­tive­ness in an in­creas­ingly chal­leng­ing in­ter­na­tional en­vi­ron­ment.

Aerial view of Kingston Wharves Lim­ited.

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