The Economic Commission for Latin America and the Caribbean on Wednesday forecast that Latin America and the Caribbean will cut its growth rate to 2.1 percent in 2022, after reaching an average of 6.2 percent last year.
The Executive Secretary of the Economic Commission for Latin America and the Caribbean (CEPAL), Alicia Barcena, explained that the region is facing a period of tremendous uncertainty as disparities deepen and will face a smaller increase in gross domestic product (GDP) and trade.
He explained that the economic slowdown occurs amid great discrepancies in the capabilities of developed, emerging and developing countries to implement social, monetary, health and immunization policies for a sustainable recovery from the crisis unleashed by the Covid-19 epidemic.
The Economic Commission for Latin America and the Caribbean expects Brazil, the largest economy, to be the country that will make the least progress this year at only 0.5 percent, while Mexico will make it 2.9 percent, Colombia 3.7 percent and Chile 1.9 percent.
Barcena noted that a scenario like the one proposed in 2022 is due to the fact that labor markets have not recovered from the blow dealt by the health emergency.
“The epidemic has had a very strong impact on informality, which is expected to increase with devastating social impacts,” he added, adding that these effects are clearly visible in the vulnerability of some sectors of the population, such as women.
However, ECLAC expects a slight improvement in poverty and extreme poverty levels, with a decline of 1.5 percent in the first and 0.7 percent in the second.
The study by that United Nations body attributes the complex reality of the region in 2022 to perseverance and uncertainty about the evolution of the pandemic, a sharp slowdown in global growth and continued low investment and productivity and a slow recovery of employment.
As well as the continuation of the social effects caused by the crisis, the reduction of fiscal space, inflationary increases, and financial imbalances.
The report highlights that lower global growth will mean lower external demand and lower growth in global trade, which will have a direct impact on Latin American economies.
Regarding the prices of raw materials, on which a significant part of regional GDP depends, forecasts indicate a decrease or, in the best case, a stay at the level of 2021, but not a rise.
(taken from Prensa Latina)
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