LatAm Growth Impaired by Negative Commodity Shock

CEIC Macro Watch Global #43 - April 30, 2015 GDP growth in Chile, Colombia, Ecuador and Peru has been slowing down since the second half of 2013. During the last quarter of 2014, Chile’s and Peru’s economies grew by less than 2% year-on-year, while Colombia and Ecuador saw slower growth of 3.5%, in contrast to previous periods when it was typically above 4%. This economic slowdown can largely be attributed to the commodity price slump, highlighting both reduced demand and a glut in supply causing a sharp fall in revenue from exports. Partially due to the softening demand, Brent oil prices and the Commodity Research Bureau’s Spot Metal Price Index have been experiencing double-digit declines since August 2014 and December 2014 respectively. Ecuador and Colombia were adversely affected by plummeting oil prices as petroleum exports contributed 51.7% and 52.8% of total exports respectively in 2014. The depressed metal prices affected both Chile’s and Peru’s copper-reliant economy where copper represented 50.1% and 51.9% of exports respectively in 2014. The four countries benefited from the previous commodities boom which served as their engine for rapid economic expansion. However, the sluggish growth as commodity demand dampens and prices decline illustrate the risk from lack of diversification. By Josiery Abas in the Philippines - CEIC Analyst Discuss this post and many other topics in our LinkedIn Group (you must be a LinkedIn member to participate). Request a Free Trial Subscription. Back to Blog
4th May 2015 LatAm Growth Impaired by Negative Commodity Shock

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