By Lucien Chauvin
Andean economics: Beyond the boom
Andean governments are stepping up efforts co counter an economic slowdown in their once booming economies. Most expect the decline to be short-lived
South America’s three most open economies have hit
a rough patch. Booms in Chile, Colombia and Peru have started
to lose their momentum, following a drop in worldwide commodity
prices and expectations of tighter global liquidity.
Export earnings have fallen and local currencies have
depreciated, in some cases severely: Peru’s
currency, for one, plunged by more than 10% percent against the
dollar in the first eight months of the year. Domestic demand
has also softened unexpectedly across the region, particularly
for durable goods. Car sales in Colombia were down 23% in the
first quarter, although analysts expect an uptick in the second
While growth in the three economies is still enviable in
global terms — Chile is projected to grow by 4.6%,
Colombia by 4% and Peru by 5.5% — authorities are now
scrambling to roll out measures to stimulate growth, cut
bureaucracy and boost...
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