“Such recovery is attributed largely to a rebound in South America, where growth is expected to reach 1.5% in 2017,” the study reads.
Meanwhile, Mexico, Central America and the Caribbean as a sub-region —which depend less on commodity exports and are more closely tied to the economic recovery in the United States—are expected to remain in positive territory this year and next at 2.4% and 2.7%, respectively.
“The regional slowdown seems to finally be coming to an end, with average growth expected to turn positive in 2017,” said Augusto de la Torre, World Bank Chief Economist for Latin America and the Caribbean.
“Now, we are emphasizing the need for a major switch of resources (workers, capital, entrepreneurial talent, financing) towards the production of goods and services that are traded in international markets—that is, towards tradable activities.”
The report explains that in the new reality of lower commodity prices the region can no longer depend on domestic demand to boost growth, as it did during the bonanza years.
“A turn toward outside buyers will be crucial to boost economic activity,” the World Bank points out.