MONTEVIDEO (Reuters) - The commodities-exporting economies of Latin America will continue expanding in the years ahead, driven by demand from China despite slower growth in its economy, Nobel Prize-winning economist Joseph Stiglitz said on Saturday.
Latin America is reliant on demand from trade partners in Asia, especially China, as well as in Europe and North America.
Stiglitz, a former chief economist for the World Bank, said China’s changing diet will keep the tap open for Latin American raw materials even as its economy slows to about 7 percent growth from 9 percent.
“That’s still enough to keep Latin America growing,” the Columbia University professor told Reuters on the sidelines of a conference organized by Uruguay’s economy ministry.
“I’m hopeful that even with China’s growth going somewhere slower, the demand for commodities will continue because their incomes have risen and the diet is changing,” he said. “You (Latin Americans) will benefit from that.”
The economy of tiny Uruguay, as well as that of neighboring giants Brazil and Argentina, depends on agriculture. The region is a top supplier of soybeans and other grains to China, where they are turned into meal to feed cattle.
China’s emerging middle class has discovered a taste for beef steak that is expected to continue despite slower growth in the country’s gross domestic product.
Latin America will pick up its pace of economic growth next year to expand between 3.2 and 3.3 percent as the global economy continues to strengthen, Inter-American Development Bank President Luis Alberto Moreno said late last month.
In 2014, the region should grow around half a percentage point higher than the projected 2.7 to 2.8 percent expansion for this year, Moreno said.
The IADB’s forecast is broadly in line with that of the International Monetary Fund, which last month cut its 2014 growth projection for the region to 3.1 percent from 3.4 percent.
Writing by Hugh Bronstein; editing by Jackie Frank