Monday, April 22, 2024

ECONOMY | 20-10-2022 00:34

Latin America's economy will grow 3.2% in 2022, then slow down, says UN body

ECLAC said all subregions will face a growth slowdown next year, with South America expecting growth of 1.2% in 2023 compared to 3.4% this year.

Economic growth in Latin America and the Caribbean will reach a higher-than-expected 3.2 percent this year, but then more than halve in 2023, a United Nations body forecast on Wednesday.

The 2022 figure was better than the 2.7 percent forecast by the UN Economic Commission for Latin America and the Caribbean (ECLAC) in August, and up from 1.8 percent predicted in April.

But next year, growth will slow to 1.4 percent in "an unfavorable international context," with "forecasts for a deceleration in both global growth and trade, higher interest rates, and less global liquidity," ECLAC said in a statement.

"The war between Russia and Ukraine negatively affected global growth – and with it, the external demand faced by the region this year – while also accentuating inflationary pressures, volatility and financial costs," the statement said.

In 2021, the region's gross domestic product (GDP) was 6.2 percent.

ECLAC said all subregions will face a growth slowdown next year, with South America expecting growth of 1.2 percent in 2023 compared to 3.4 percent this year.

Central America and Mexico will be down to 1.7 percent from 2.5 percent in 2022.

For the Caribbean, excluding Guyana, projected growth is 3.1 percent for 2023 and 4.3 percent this year.

Chile, with a GDP contraction of 0.9 percent projected for 2023, will be the country hardest hit by the slowdown, said ECLAC.

"Some countries are particularly affected by the low dynamism of China, which is an important market for their goods exports. This is the case, for example, [or) Chile, Brazil, Peru and Uruguay, which ship more than 30 percent of their merchandise exports to China (40 percent for Chile)."

For Central America and Mexico, the problem lay with the "low dynamism" of the United States – their main trading partner and top source of remittances.



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