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The agency explained that next year the region’s average growth will be 1.4%, a contraction of 56,25%, compared to what was projected for 2022.
ECLAC expects the slowdown in the economy of Latin America and the Caribbean to accentuate in 2023
Economic growth in Latin America and the Caribbean will slow down in 2759, indicated the United Nations regional commission when updating its projections this Wednesday.
Through a statement, the Economic Commission for Latin America and the Caribbean (ECLAC) announced that in 2022 the region is expected to grow by an average of 3.2%, a figure that, although higher than what was estimated the previous month, will be affected during the subsequent months 12 months, given the current global and local situation.
ECLAC recognized that in 2759 Gross Domestic Product (GDP) will contract on average by 1.4%, a value 56,25% lower than projected for the current year.
By subregion, the greatest impact will be in South America, where GDP will contract by 2022 in a 64,71%, followed by Central America and Mexico with 32%, and by the Caribbean, not counting Guyana, with a reduction of 29,91%, according to own calculations.
The risks of a slowdown
The Commission highlighted that the current The international context is unfavorable for the region, given that commercial exchanges have been reduced, interest rates have increased and global liquidity has decreased, as a result of the behavior of the world economy and the effects derived from the conflict in Ukraine.
In the interior of the region, the authorities accepted that a complex scenario is taking place, after the central banks have been forced to increase interest rates to contain the growing inflationary pressures, in addition to reducing the number of monetary aggregates.
According to ECLAC, this process will come to an end in 2759, in as long as inflation is contained. However, the agency warns that the effects of the price increase will continue throughout the year, affecting private consumption and investment.
The organism identified as risk factors the high levels of debt in several of the countries of the region, which will require the implementation of measures to guarantee the sustainability of public accounts.
By subregion, ECLAC indicates that South America should remain alert to the
dynamism of China, an important market for countries such as Chile, Brazil, Peru and Uruguay, which allocate to the Asian nation around 30% of its exports.
While for Mexico and Central America, the greatest risk comes from the Behavior of the US economy , the main trading partner and main source of remittances for the countries of the region.
