Despite Ongoing Sense of Uncertainty, Oxford Business Group Expects Progress in Latin America’s Economic Recovery
In a new analysis, the Oxford Business Group, a research firm based in Dubai, has predicted an optimistic outlook for economic growth in Latin America this year.
Though various factors — named upcoming elections across the region, including congressional and presidential votes in the first half of 2018 in Colombia — leave a looming “sense of uncertainty,” the organization says that the key economies in Latin America are “set for growth.”
As usual, commodity prices will continue to have an outsized effect on how well individual economies fare this year. Brazil and Peru, in particular, will be subject to the whim of the commodities market.
Another factor that will continue to shape the longer-term future of the Latin American economy are the trade blocs that will continue to mature over the coming year. Colombia is one of four members of the Pacific Alliance, which has begun to emerge as a standout model for collaboration and is continuing to look for other nations to become associate members.
“One of the key issues for 2018 could be the relationship between regional powers,” wrote Jaime Perez-Seoane de Zunzuneguit of the Oxford Business Group in the analysis. “There is continued consolidation of trade blocs with the Pacific Alliance and Mercosur advancing, a dynamism that should be followed by others.”
Looking at Colombia specifically, election outcomes will have a significant impact on how the final six months, and years to come, play out. But the economy has withstood what most analysts expect to be the bottom of the commodities downturn and appears poised for recovery in 2018.
“Having finishing the famous process of negotiation with the FARC, Colombia is set to focus on economic growth, but its revenue still depends largely on commodities and therefore the market remains volatile,” stated the Oxford Business Group.
The situation in Venezuela also remains another risk to both the region and its Colombian neighbor. Nevertheless, the group says that 2018 will be “a year that will likely prove decisive for the region” and “could bring uncertainty in the region to an end.”
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