1955, Year of Setback

While the U.S. economy ran at full speed last year, Latin America's economy stumbled and lost ground, especially in the field of foreign trade. Last week, in Vol. I, No. I of its new and exhaustive Economic Bulletin for Latin America, the United Nations analyzed the trade recession--and spotted a trend that looked no better.

What Latin America really needs from foreign trade is enough return to buy the capital goods required to send its Johnny-come-lately industries into an upward spiral, lifting the people's standard of living. This "capacity to import" is set largely by the volume of exports of farm products and minerals and the price they bring. Last year Latin Americans turned out plenty of these products, e.g., agricultural output (sugar, bananas, meat, coffee, cacao, wool) was bigger than in 1954, both total and per capita. But the prices of the exports fell so sharply (notably in coffee and cacao) that the total return dropped by nearly 5%.

The most visible result was that the region's collective trade balance sank in a year from $564 million to $130 million (on export sales worth more than $7 billion). By mid-1955 imports of capital goods had sagged, and Latin American industry failed to show a healthy expansion during 1955. And the worst drop in imports of capital goods probably is still to come, as a delayed reaction to forced cutbacks in orders.

This file is automatically generated by a robot program, so reader's discretion is required.