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Economic Survey of Latin America and the Caribbean 1999-2000

image of Economic Survey of Latin America and the Caribbean 1999-2000

This summary provides an assessment of the Latin America and the Caribbean region's economy during 1999 and the first half of 2000. It presents an overview of each country's external sector, macroeconomic policy, activity levels, inflation, employment, saving and investment. The publication contains thirteen statistical tables.

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Argentina

The level of activity fell by 3% in 1999, and the downturn in domestic spending had an impact on consumption and, above all, investment. For the first time in seven years the volume of goods and services exports actually decreased. Although the aggregate decrease in quantity was slight, the slump in unit prices led to an appreciable reduction in the value of merchandise exports .The decline in imports caused the trade gap to narrow by a significant amount, however, and this helped to scale back the negative balance on the current account. Against a backdrop of flagging demand, and with the exchange rate firmly tied to the dollar, the country witnessed price deflation, with the CPI dropping by 1.8% in 1999. For the year overall, the rising labour participation rate, combined with weaker demand for labour, raised the unemployment rate. However, although high, it did not approach the levels recorded during the recession of the mid-1990s. The compressed tax base hurt government revenues and, although capital inflows offset the impact of this trend to some extent, the national government deficit did rise somewhat. The adverse fiscal outlook prompted the new Administration, which took office in late 1999, to adopt adjustment measures based on spending cuts and tax changes.

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