The Economic Commission for Latin America and the Caribbean (ECLAC) Tuesday warned of the challenges to be faced by countries in the region as they move to reactivate investment and growth in a context of growing external and internal restrictions.
In its latest annual report titled “Economic Survey of Latin America and the Caribbean 2022″, the United Nations organization referred to the dynamics and challenges of investment to promote a sustainable and inclusive recovery, in which it projects economic growth for the current year of 2.7 percent average.
It said such growth would occur in a context of strong macroeconomic restrictions that are hitting the economies of the region.
But ECLAC said the Caribbean, the only subregion to grow more than in 2021 by 4.7 percent, not including Guyana, compared to four percent in the previous year.
ECLAC notes that in the case of the Caribbean, while income has increased “it has a precarious situation with many countries such as Barbados and Belize continuing to have a huge debt.
“So in this context of strong external restrictions, we are projecting that the region will grow 2.7 percent, which is less than half of what it grew last year and so it will continue with that low growth path as we have seen and this year, we are expecting 2.7 percent growth and we expect that the slowdown will continue to feature”.
ECLAC said Haiti will be the only Caribbean country that will register a minus 0.2 growth.
According to the report presented at a news conference, a sequence of crises has led to the scenario of low growth and inflationary acceleration presented by the global economy, which together with the lower growth of the trade, the appreciation of the dollar, and the tightening of global financial conditions will negatively affect the countries of the region.
“In a context of multiple objectives and growing restrictions, a coordination of macroeconomic policies is required to support the acceleration of growth, investment, the reduction of poverty and inequality, while facing inflationary dynamics”, said Mario Cimoli, the ECLAC acting executive secretary.
The report notes that the countries of Latin America and the Caribbean face a complex economic panorama in 2022 and in the years to come. Added to the lower economic growth are strong inflationary pressures, low dynamism in job creation, falls in investment and growing social demands. This situation has translated into great challenges for macroeconomic policy, which must reconcile policies that promote economic reactivation with policies aimed at controlling inflation and making public finances sustainable, according to the report.
It said added to the complex internal scenario of the region is an international scenario in which the war between the Russian Federation and Ukraine has caused growing geopolitical tensions, less dynamism in global economic growth, less food availability and increases in the price of energy that the inflationary pressures that had been occurring as a result of the supply shocks generated by the coronavirus disease (COVID-19) pandemic have increased, the report states.
ECLAC projects economic growth in South America will grow by 2.6 percent compared to 6.9 in 2021, the group made up of Central America and Mexico by 2.5 percent compared to 5.7 percent in 2021.
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