In 2022, the region grew 3.8% according to preliminary figures. In April, ECLAC would have predicted that Latin America and the Caribbean would grow 1.2% this year.
According to the report, Brazil’s economy will grow 2.5% this year and 1.4% next year; Argentina’s will fall 3% and 1.6%, respectively, while Mexico’s will advance 2.9% and 1.8%. For its part, the Peruvian GDP will rise 1.3% this year and 2.5% next, while the Colombian will climb 1.2% and 1.9%.
“Projections for 2024 indicate that the low dynamism in the region would continue. The international context is expected to continue to be unfavorable, with GDP growth and world trade well below historical averages,” said the agency based in in Santiago.
Domestically, added the Economic Survey of Latin America and the Caribbean, the limited space for macroeconomic policy, both fiscal and monetary, remains.
“Public debt is at high levels, which, together with the increase in foreign and domestic interest rates and an expected fall in tax revenues as a result of lower growth, makes it possible to foresee limited fiscal space for the region as a whole” the report said.
Last July, Chile became the first major economy in the region to start a long-awaited monetary easing cycle after central banks raised rates sharply to cope with inflation left behind by the post-pandemic recovery and the war in Ukraine.
The document also highlighted that although there is a drop in the inflation dynamics, it remains at levels higher than those observed before the pandemic and the target ranges of the central banks, which “allows us to think that interest rates will remain relatively high for the remainder of the year.
On the other hand, the low growth in activity this year and the next will result in a slowdown in employment growth, which is estimated at 1.9% in 2023 and 1.1% in 2024, with a deterioration in the quality of jobs. jobs and the consequent effect on wages and poverty levels.