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Latin American economy will suffer one of the worst falls due to the crisis

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The slowdown that the economies of Latin America will suffer this year and next will be the most serious among the regions of developing countries, according to an analysis carried out by UN experts on the situation of the world economy.

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In Latin America and the Caribbean, many countries are coming under stronger and stronger pressure on their external debt positions and the rising cost of living is a worsening problem”, said the head of the United Nations Agency for Trade and Development (UNCTAD), Rebecca Grynspan.

This body presented one of the most comprehensive documents produced to date on the factors that have overlapped in recent years – the pandemic, supply chain disruptions, the war in Ukraine and inflation– to create the conditions for a deep recession.

Of all the regions, the Latin American economy will experience one of the steepest falls and will grow only 2.6% this year, compared to 6.6% in 2021 (recovery after bottoming out in 2020 due to the pandemic), although the situation will be even worse in 2023, when growth will be just 1.1%, according to these projections.

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The Latin American panorama will follow the pattern that will be determined by its three largest economies. The worst forecasts are for Mexico Y Brazilwhich will have growth calculated at 1.8% in each case this year, although the outlook is even more negative for the latter in 2023 (0.6%).

Argentinathe third largest economy in the region, will grow more, 4.1% in 2022, although in all three cases the growth will be less than half of what it was in 2021.

In Central America and the Caribbean, growth will fall to 4.1% this year compared to 7.8% in fiscal 2021, while in South America (excluding Brazil and Argentina) the economic slowdown will be more acute: 3.1% compared to 9.1%.

The external debt burden is one of the factors that most worries the UNCTAD in relation to the immediate future of Latin America, with countries (especially in the Caribbean) that are on the verge of a default situation, while other countries are paying a very high risk premium.

The conclusion of the organization’s economists is that tightening monetary policy further in Latin America can help moderate inflation and the volatility of currencies against the dollar, but at the same time it can further depress domestic demand, lead to recession and explosions. social.

With information from EFE

Source: Gestion

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