Official statistics show that major South American economies, except for Venezuela, are growing again and left the impact of the world crisis behind.

Brazil, the regional giant, grew 9 percent this year in the first quarter over the same term in 2009, thanks to investment and consumption.

Expenditure in capital goods, that is, machines and equipment able to increase future production, rose by 7.4 percent. In the meantime, the agricultural sector expanded 2.7 percent, based on the data supplied by the Brazilian Geography and Statistics Institute (IBGE).

The rest of the map also shows favorable results. In the first quarter, Argentina grew 6.8 percent; Colombia 4.4 percent; Peru 6 percent; Paraguay 10.9 percent; Uruguay 8.9 percent; Bolivia 3.26 percent; Ecuador 0.6 percent, and Chile, despite the earthquake, advanced 1 percent.

While oil prices average USD 70 thus far this year, the Venezuelan economy has failed to overcome recession and suffered a 5.8-percent setback in the first quarter.

Venezuelans not only undergo the plight of recession with layoffs, but also prices soar at a fast rate and undermine the purchasing power.

From January to May, inflation was higher than 5.2 percent in no Latin American country. On the contrary, in Venezuela, the inflation rate accounts for 14.2 percent.

The treatment
The United Nations Economic Commission for Latin America and the Caribbean (Eclac) analyzed in a report the policies implemented by Latin American countries to contain the earthquake in the United States and Europe, the global growth driving forces.

In the monetary area, "central banks deployed an intense activity to inject liquidity in order to allow for the smooth operation of local credit markets or grant funds where they do not arrive."

In the fiscal area, the governments have supplied a dose of the expenditure to several programs, such as infrastructure and incentives to strategic sectors.

At the same time, curtailed taxes and programs to protect the underprivileged complement the government action.

Eclac Secretary Alicia Bárcena said this week that the organization expanded its forecast of the regional growth in 2010 from 4.1 to 4.5 percent.

The economist told Efe that, to some extent, better prospects are due to the raw material high prices in the world market.

"Mostly that, because there has been an upturn in the Asian economy" with China's strength which "has afforded South America more economic dynamism," Bárcena said.

In an environment where private investment has vanished and inflation has taken the purchasing power away from the local currency injected by the government, specialized firms do not anticipate much growth for Venezuela despite high oil prices.
vsalmeron@eluniversal.com

Translated by Conchita Delgado