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Latin America and the Caribbean in the World Economy 2014

Regional integration and value chains in a challenging external environment

image of Latin America and the Caribbean in the World Economy 2014
The 2014 edition of this publication reviews the main features of a persistently weak global economy and world trade and then turns to global and regional trade trends and prospects. The publication considers the main changes in the organization of production and global trade associated with international production networks, which are at the heart of current mega-regional negotiations. It looks at how the the region's countries are positioned in international production networks and value chains. It analyzes the main factors underpinning participation in production networks and value chains, as well as the implications they have for integration.

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Summary

The steadily deteriorating global economic outlook is likely to dampen trade in Latin America and the Caribbean in 2014. Growth rates in developed countries are projected to show only a slight improvement over 2013. In the eurozone, the stagnation of the French and German economies caused growth projections to be revised down to less than 1%, while preliminary data for the second half of 2014 suggest that several eurozone countries could come perilously close to another recession. Meanwhile, Japan experienced exceptional first-quarter growth as consumers brought forward purchases ahead of a consumption tax hike in April, but this was followed by a plunge in economic activity as consumption subsequently slumped. Slight gains are expected over the remainder of the year, with Japan’s growth rate for 2014 now estimated at about 1%. The United States economy contracted in the first quarter, but returned to growth in the second. Overall, the world economy in 2014 is expected to grow more slowly than was projected in July, at close to the 2013 rate (see table 1).

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