The story sounds almost too good to be true. Exports grow at high double-digit rates and strong investment provides for the necessary capacity to accommodate the growing domestic demand. Meanwhile, unemployment continues to converge on historic lows and the Central Bank is making inways into driving down inflation to pre-Peso Crisis levels, despite the booming economy. The upgrade notwithstanding, Argentina remains the slowest growing economy within the region in 2000. However, the business community is anything but cheerful and attributes the private sector s continued cautious attitude towards new investments to the uncertainty generated by the government s desire to reform the country s labour code.
Exports remain a key driver of economic growth in the region.
With the exception of Colombia, all surveyed economies will enjoy double-digit export growth this year. Venezuela leads the pack with exports growing by more than one third this year, owing to the ongoing oil price bonanza. Fiscal deficits coming down. Excessive government spending has often been at the root of economic crises that have shaken the region in the past and only Venezuela appears to be continuing in the mould. The trend not only reflects higher tax takes in the wake of recovering economies but also, and more importantly in the long haul, the anchoring of sounder fiscal policies.