Effects of rearmament and of fluctuations of demand in industrial countries

The course of events during the past three years has once again emphasized the influence of economic fluctuations in industrial countries upon the domestic economies of Latin America. Recent expenditures on defence and on private investment in the United States and leading Western European countries have brought about sharp changes in demand, which, depending upon the availability of raw materials inventories, have had equally strong repercussions on the prices and volume of their trade with Latin America. The rise in incomes resulting from defence programmes and the ensuing high levels of economic activity have affected North American and European consumption behaviour, an element of very considerable importance to Latin America. Of outstanding significance has been the demand in industrial areas for imported foodstuffs, and the changing pyschology determining normal or forward-buying of durable goods manufactured from raw materials which Latin America either exports or requires for its economic development. As a result, the effects of rearmament, on raw materials prices, on the availability of capital goods and on consumer expenditures in industrial countries have combined to cause a greater influence upon recent economic developments within Latin America.

Sustainable Development Goals:

Decent Work and Economic Growth

Industry, Innovation and Infrastructure

Peace, Justice and Strong Institutions