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Chinese and US negotiators briefly met Wednesday (July 31st) in Shanghai, the first resumption of the two-month trade dialogue between the two countries. This may be an improvement in the very tense trade relations between the two countries since last year and an improvement would be welcome, as the tariff war has a direct impact on the slowdown of the global economy. The latest example is Latin America, which is not immune to this phenomenon.
From our correspondent in Santiago ,
The UN on Wednesday presented its growth forecast for the Latin America region in 2019, and they are not good. Indeed, only 0.5% of GDP growth is expected in Latin America and the Caribbean for the year 2019. This is what the United Nations ( CEPAL ) anticipates for the region. That's almost half as much as last year, and the numbers are particularly bad for South American countries.
The economic war between China and the United States, which has been going on for more than a year now, is not the only factor, but it is one of the factors that weighs particularly heavily on the region's growth prospects. .
According to a UN report published in Santiago de Chile, since the beginning of the year, the decline in trade linked to trade tensions between the two giants of the world economy has already cost the Latin American countries equivalent to 6% of their GDP.
Chilean copper affected
Latin American countries are also vulnerable to this trade conflict between China and the United States as most economies are mainly based on the export of agricultural and mining commodities. The uncertainty associated with these trade tensions has tended to lower commodity prices, especially minerals. Chile, for example, is particularly affected because, as the world's largest copper producer, its growth is directly dependent on global red metal prices. And its growth prospects for this year have been revised downwards in the UN report.
Among the countries in the region, Brazil and Argentina are particularly hard hit, and Venezuela is going through an extremely deep economic crisis. The UN Commission for the Economy in Latin America, CEPAL, predicts a 23% recession in Venezuela this year, even stronger than last year.
Argentina and Brazil, two " big " suffering
To a lesser extent, Brazil's growth is also expected to slow, despite promises by President Jair Bolsonaro to revive the economy . It is expected to reach 0.8% this year.
One of the reasons for these difficulties is the rupture of a mining dam last January, which has reduced the production of iron ore.
Finally according to the report, the neighboring country, Argentina, in crisis since last year, will end 2019 in recession, with -1.8% growth.
Argentina and Brazil are important trading partners for each other. And in fact, in addition to the problems that have already been mentioned, they suffer mutually from the economic difficulties that everyone is going through.