Economic Survey of Latin America and the Caribbean 2001-2002

image of Economic Survey of Latin America and the Caribbean 2001-2002

This survey consists of two distinctive parts. The first part examines main aspects of the regional economy, while the second part contains an analysis of the individual countries in Latin America and the Caribbean. The part on the regional economy covers the situation in the first semester of 2002 and the prospects for the year as a whole. It also analyzes various aspects of the regional economy in 2001, including macroeconomics policies and reforms, the performance of the internal economy, and the external sector. The part on individual countries covers 20 nations in Latin America and the English-speaking Caribbean. It covers the period 2001 and early 2002, revealing country reports with tables and figures showing main economic indicators.




The Uruguayan economy's 3% contraction in 2001 marked the third consecutive year of a recession in which GDP shrank by 7% and per capita income, by 12%. Economic activity was badly hurt in 2001 by the slowdown in the world economy and global trade, by instability in neighbouring countries and, especially, by a fresh outbreak of foot-and-mouth disease, which was thought to have been eradicated several years earlier. The public-sector deficit remained obdurately above 4% of GDP and had to be financed by means of increased external borrowing. In recent years repeated resort to external borrowing has greatly increased the non-financial public sector's foreign-currency debt burden, which, at the end of 2001, was equivalent to 43% of output. The ban on beef sales sent exports plummeting; nevertheless, as the slump in imports was even steeper, the balance-of-payments current-account deficit widened only slightly, to 2.6% of GDP. The private sector posted a new surplus, this time in excess of 1.5% of GDP. The simultaneous drop in domestic and external demand translated into a steep rise in unemployment, with over 15% of the economically active population out of work, and eased pressure on domestic prices, which climbed by less than 4%.


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