LatAm economy to grow 5 pct in 2010, U.N. agency says :: La Prensa :: America in English

LatAm economy to grow 5 pct in 2010, U.N. agency says :: La Prensa :: America in English

Geneva, Sep 14 (EFE).- The Latin American economy will grow this year by approximately 5 percent and in some countries in the region the increase could exceed 6 percent, according to the U.N. Conference on Trade and Development.

In its 2010 report, UNCTAD says that the recovery in the gross domestic product predicted for the region probably will be "more moderate" in Central America and the Caribbean.

Contributing to this trend, the study says, is the "rather radical" reorientation of the macroeconomic policies that has occurred in the region after the Asian financial crisis of the late 1990s and the 2001-2002 Argentine debt crisis.

Then, the governments of the Latin American countries embarked upon monetary and exchange rate policies oriented toward maintaining international competitiveness, it says.

And the report adds that in several countries tax revenues increased, providing those governments with the necessary margin for action as well as additional resources that could be spent on infrastructure and social transfers.

In a parallel manner, UNCTAD notes that measures specific to the labor market were adopted, including substantial increases in the minimum wage, the reactivation of collective negotiating entities and the launching of public works programs.

Thanks to that, and also amid a favorable international situation, in particular higher raw materials prices, employment improved in the region starting in 2003.

In that way, and for the first time in almost 30 years, employment in the informal sector was reduced at the same time that unemployment and poverty receded up until 2008, according to the UNCTAD report.

The report notes that between 1980 and 2002, per capita GDP in Latin American remained relatively stagnant while at the same time unemployment was rising and productivity was falling due to lack of investment.