Growth pessimism is gaining ground in Latin America

2015 ◽  
Keyword(s):  
Latin America ◽  
Current Account ◽  
Important Determinant ◽  
Current Account Deficit ◽  
Commodity Prices ◽  
South American ◽  
Content Type ◽  
The Caribbean ◽  
The Impact

Significance In December 2014 ECLAC had anticipated expansion in Latin America and the Caribbean (LAC) of 2.2% for 2015. It is now forecasting growth of only 0.5%, down from 1.1% in 2014 and 2.9% in 2013, principally due to the impact of lower commodity prices on South American economies and, particularly, Brazil. Impacts Due largely to weaker exports, LAC's current account deficit is forecast to widen from 2.7% of GDP in 2014 to 3.0% this year. Growth is forecast to drop this year in seven of the ten main South American countries. In LAC, investment is an unusually important determinant not only of growth but also the size of its swings.

Fiscal deficits raise debt concerns in Latin America

2016 ◽  
Keyword(s):  
Latin America ◽  
Commodity Prices ◽  
South American ◽  
Content Type ◽  
Government Deficits ◽  
Economic Commission ◽  
Growth Prospects ◽  
The Caribbean ◽  
Investment Spending ◽  
Spending Cuts

Subject The deteriorating fiscal position. Significance According to the UN Economic Commission for Latin America and the Caribbean (ECLAC), government deficits in most South American countries and Mexico widened in 2015 for the third consecutive year, in a context of slower economic growth and lower commodity prices. Barring Brazil, the increase was generally small but government borrowing, rising for several years, is increasingly limiting administrations' room for fiscal manoeuvre. Impacts Government borrowing is rising -- as are borrowing costs. Declining revenues may force unpopular spending cuts, worsening growth prospects. Caribbean countries in particular face unsustainable debt-servicing burdens that leave little for social and investment spending.

scholarly journals Foreign direct investment in Latin America and the Caribbean – the evolution of flows

2021 ◽  
Vol 7 (3) ◽  
pp. 50-63
Author(s):  
S. A. Chirkin
Keyword(s):  
Foreign Direct Investment ◽  
Latin America ◽  
Multinational Corporations ◽  
Direct Investment ◽  
Commodity Prices ◽  
Capital Inflows ◽  
South American ◽  
Fdi Inflows ◽  
Macroeconomic Conditions ◽  
The Caribbean

The article examines the flows of foreign direct investment (FDI) in the countries of Latin America and the Caribbean (LACB) for the period from 2010 to 2020. The sources of capital inflows, their structural components, as well as the distribution of attracted investments by sectors of the recipient countries ' economies are analyzed. Quantitative indicators of FDI inflows and outflows for individual countries and for the region as a whole are presented, highlighting general trends. The trend of a decrease in the volume of attracted FDI in the LACB is emphasized. It is concluded that the decrease in foreign direct investment in South American countries confirms the direct dependence of FDI inflows on macroeconomic conditions and fluctuations in world commodity prices. Changes are noted in the approaches of multinational corporations to invest capital abroad in the context of the COVID-19 pandemic in favor of their local or cross-border use. The assessment of the actions of the authorities of the states of the region to attract foreign investment is given. The article examines the situation in the field of unresolved investment disputes involving the countries of the region and its impact on investment attractiveness. The role of Chinese FDI in the region, including its effectiveness in political terms, is considered separately.

Another year of strong growth ahead in Panama

2020 ◽  
Keyword(s):  
Growth Rate ◽  
Latin America ◽  
Current Account ◽  
Public Debt ◽  
Economic Model ◽  
Current Account Deficit ◽  
Water Shortages ◽  
Content Type ◽  
Income Levels ◽  
Per Capita

Subject Economic update. Significance Panama’s economy has performed strongly over the last 20 years, posting average annual growth of 5.8% -- more than double the growth rate of Latin America as a whole (2.4%). Its economic model, built on banking, logistics and trade activities, has also facilitated one of the highest per capita income levels in the region. Impacts Prolonged water shortages at the Canal could eventually threaten Panama’s status as the region’s main logistics hub. The current account deficit will remain above 5% of GDP this year but will narrow slightly due to a modest expansion of copper exports. The change in the fiscal rule's deficit ceiling, allowing for wider fiscal imbalances, will further weaken public debt sustainability.

Remittances to Latin America will slow this year

2019 ◽  
Keyword(s):  
United States ◽  
Economic Growth ◽  
Latin America ◽  
Lower Cost ◽  
The United States ◽  
Poor Growth ◽  
Content Type ◽  
Digital Services ◽  
The Caribbean ◽  
The Impact

Subject Remittance growth in Latin America. Significance Remittances to Latin America and the Caribbean (LAC) grew almost 10% last year, with Mexico registering another year of record inflows, driven by strong economic growth and low unemployment in the United States. Impacts Strong remittance growth is helping to counter the impact of poor growth in many LAC countries. Remittances from Venezuelan migrants are helping to alleviate the suffering of relatives there, possibly to the government's benefit. Sending costs remain high in LAC, but migrants are embracing lower-cost digital services.

Commodity prices will weigh on Latin America's FDI

2015 ◽  
Keyword(s):  
Foreign Direct Investment ◽  
Latin America ◽  
Direct Investment ◽  
Commodity Prices ◽  
Content Type ◽  
Economic Commission ◽  
The Caribbean

Subject The outlook for inward FDI. Significance A drop in foreign direct investment (FDI) in Latin America and the Caribbean in 2014 marked a change of trend, according to a report released on May 27 by the UN Economic Commission for Latin America and the Caribbean (ECLAC). The decline, attributed principally to lower commodity prices, was the first since 2009 and is likely to persist this year. Impacts At 2.6% of GDP, inbound FDI in 2014 was its lowest since 2009 and will remain slightly below its long-term average this year. Lower commodity prices reduced average returns on FDI to around 5% in 2014, down from over 9% in 2006-08; no rapid upturn is likely. Most investment abroad by LAC companies is within the region and, in 2015, will continue to be constrained by its sluggish growth.

COVID-19, sustainable development challenges of Latin America and the Caribbean, and the potential engines for an SDGs-based recovery

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maria Alejandra Gonzalez-Perez ◽  
Mahmoud Mohieldin ◽  
G. Tomas M. Hult ◽  
Juan Velez-Ocampo
Keyword(s):  
Sustainable Development ◽  
Latin America ◽  
Social Impact ◽  
Developing Economies ◽  
Shared Responsibility ◽  
Value Chains ◽  
Structural Development ◽  
Content Type ◽  
The Caribbean ◽  
The Impact

Purpose The purpose of this study is to examine the impact of COVID-19 on the Latin America and the Caribbean (LAC) region and to discuss imperative engines for potential regional recovery. Design/methodology/approach This study conceptually discusses the effects of COVID-19 on the LAC region and highlights potential areas for recovery. Findings The LAC region have a history of facing structural development challenges – due to digital inequality, environmental degradation, erosion of democracy and financial debt – which have led to a profound discontent among people in the LAC region and this dissatisfaction has been intensified by the crises stemming from the COVID-19 pandemic. LAC region can increase its resilience and recover its path to sustainable development by consolidating impact-based regional value chains, attracting sustainability-themed foreign direct investment and nurturing structural development to facilitate LAC companies to expand into international markets (“multilatinas”). Research limitations/implications There are some preliminary studies on the economic and social impact of COVID-19 on the LAC region, however, the strategies that emerging and developing economies might pursue to promptly recover are still a matter of discussion. The uncertainty and heterogeneity of the developing and emerging economies and the multidimensional needed actions require local adaptations and adjustments. Originality/value The LAC COVID-19 crisis recovery requires shared responsibility, global solidarity, urgent and immediate cooperation and structural transformations to enable deeper regional integration. This integration should focus on impact-based value chains to be resiliently adaptable to changing global realities and arduous local contexts. This paper provides integrative avenues for potential regional recovery within the region.

Are export earnings from India’s bilateral intra-industry trade with the US and China robust enough?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sagnik Bagchi ◽  
Surajit Bhattacharyya
Keyword(s):  
Current Account ◽  
Manufacturing Industry ◽  
Current Account Deficit ◽  
Export Price ◽  
World Market ◽  
Export Share ◽  
Content Type ◽  
Persistent Problem ◽  
Industry Trade ◽  
The World

Purpose This paper aims to explore whether India’s export basket in the bilateral intra-industry trade (IIT) with two of its top trading partners characterize robust export earnings or not. This is pertinent for two reasons. First, India has a persistent problem of current account deficit for over decades now. Second, whether India’s export diversification strategy by participating in global value chains to improve export share in the world market led to the problem of the fallacy of composition. Design/methodology/approach This study considers bilateral trade data between India-USA and India-China at the HS-6 digit level over the period 1990–2018. The magnitude of total IIT is computed using the Grubel and Lloyd (1971) index. This paper then uses the unit value dispersion criterion to disentangle the magnitude of total IIT into horizontal and vertical IIT. Through a stepwise econometric exercise, this paper explores the attributes of exported goods in the IIT basket in terms of the directions of ToT, export share and export-price elasticity. Findings Across the two country pairs, the major contributors to the upsurge in IIT are five manufacturing industry groups of chemical, plastics and rubber, textiles, base metals and machinery and mechanical appliances. Across the industry groups, the dominant form of IIT has been low vertical IIT. Most of the industry groups do not characterize robust export earnings as the commodity groups have an elastic demand and an increasing trend of Terms of Trade (ToT). The exceptions are the industry groups of chemicals and textiles in India-China and India-USA, respectively. Research limitations/implications The concern of slim export earnings in most industry groups offers scepticism in maintaining the sustainability of the current account. The problem of the fallacy of composition also cannot be ruled out given the dominance of low vertical IIT. This study argues that these industry groups need to engage in labour market reforms and require access to easy credit to achieve competitiveness in the world market. Originality/value The analysis performed in this paper attempts to integrate the Prebisch-Singer hypothesis in the context of IIT. Empirical evidence to such an issue is not profound.

Exchange characteristics, capability upgrading and innovation performance: evidence from Latin America

2019 ◽  
Vol 23 (9) ◽  
pp. 1747-1763 ◽  
Author(s):  
N. Nuruzzaman ◽  
Deeksha Singh
Keyword(s):  
Latin America ◽  
Product Design ◽  
Social Capital Theory ◽  
Customer Relationship ◽  
Firm Level ◽  
Content Type ◽  
Joint Force ◽  
Capability Upgrading ◽  
The Impact ◽  
Positive Effect

Purpose This paper aims to attempt to examine the effect of firm-customer exchange characteristics, frequency and specificity, on the likelihood of the firm to generate customer-driven innovation. The authors draw from social capital theory and argue that repetitive and customer-specific exchange improves the trusts between firm and customers, which in turn ease the flows of tacit knowledge from customers to the firm. From the perspective of customer knowledge management, the authors contribute by examining the mechanism by which a firm can acquire knowledge from and about customers. The authors further argue that a firm’s ability to absorb knowledge from customers and turn them into innovation also depends on its internal capability. A firm that consistently upgrades its capacity is more likely to generate customer-driven innovation than those that do not. Also, the authors argue that the joint effect of exchange characteristics and internal capability upgrading can further increase the likelihood of customer-driven innovation. Such a joint force implies the positive moderating effect of internal capability upgrading to the relationship between exchange characteristics and customer-driven innovation. Design/methodology/approach The authors test the hypotheses on 3,000 firms from six countries in Latin America. They take advantage of the 2017 World Bank Enterprises Survey. This most recent of the survey asks questions on various types of innovation and firm-customers exchange characteristics and other firm-level variables. Findings The authors find support for our hypotheses that repeated exchange and exchanges tailored to specific customers have a positive effect on customer-driven innovation. Also, they find the support that internal capability upgrading, in the form of investment in product design, marketing and organizational development has a positive effect on customer-driven innovation. The authors also find that investment in product design positively moderates the impact of exchange characteristics on the likelihood of customer-driven innovation. Originality/value While past studies focus on strategies to acquire and manage customers’ knowledge, little has been said about how exchange attributes can encourage or discourage innovation? This question is important because various theoretical perspectives may have a different prediction on the effect of firm-customer relationship and innovation. This study attempts to bridge such theoretical tension.

scholarly journals Impact of International Trade and Trade Duties on Current Account Balance of the Balance of Payment: A study of N-11 Countries

2020 ◽  
Vol 6 (1) ◽  
pp. 11-32
Author(s):  
Imtiaz Arif ◽  
Lubna Khan ◽  
Fatima Farooq ◽  
Tahir Suleman
Keyword(s):  
International Trade ◽  
Current Account ◽  
Current Account Deficit ◽  
Unit Root Test ◽  
Future Research ◽  
Current Account Balance ◽  
Test Panel ◽  
Causality Analysis ◽  
Integration Test ◽  
The Impact

This study is aimed to investigate the impact of international trade and trade duties upon the current account balance of the balance of payment of N-11 countries. Two constituents of each factor have been considered for the purpose of analysis. For International trade, import (IMPT) and export (EXPT) of goods and services have been considered whereas, for trade duties, taxes on international trade (TOIT) and customs and other import duties (CID) have been taken as the research variables whereas, current account balance (CAB) has been taken as the dependent variable. For the purpose of analysis panel data of N-11 countries for 27 years from 1990 to 2016 has been tested using different econometric technique such as Panel unit root test, Panel co-integration test, Hausman test, Panel regression analysis and Panel causality analysis. The results demonstrate that overall research variables are co-integrated and having long term relationship and affecting each other in the conventional manner. Notably, it is observed via results that in case of N-11 countries the CAB itself is the regulating factor and all other factors are adjusted according to the movement of CAB. The study provides recommendations for the rectification of current account deficit position and also provides scope for future research as well.

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