WB predicts meager growth in Latin America, the region with the least GDP growth

The global economy is on track to break a five-year record with the lowest economic growth in the last three decades and the prospects for Latin America are not entirely encouraging: they suggest a meager growth of 2.3% in 2024, according to a report published on Tuesday by the world Bank.

But although the region’s growth is still weak, the gross domestic product (GDP) of Latin America forecast for this year is slightly above the 2.2% recorded in 2023 and is expected to recover to 2.5% in 2025.

Globally, growth will slow in 2024 for the third consecutive year and will go from 2.6% registered in 2023 to 2.4% this year, indicated the World Economic Outlook report of the world Bank.

“Without a major course correction, the 2020s will go down in history as a decade of wasted opportunities”said Indermit Gill, chief economist and vice president of the World Bank Group. “Short-term growth will remain weak and will lead many developing countries, especially the poorest, into a trap: with crippling levels of debt and precarious access to food for almost one in three people.”.

The outlook was released as the risk of a global recession appears to have diminished, largely due to the strength of the U.S. economy. However, rising geopolitical tensions present threats to the global economy in the short term.

In the medium term, the situation of developing economies has been clouded by the slowdown in growth in most of the world’s most advanced economies, the slowness of international trade and the more restrictive financial conditions of recent decades.

In 2024, world trade is expected to be half of that recorded in the decade before the pandemic, the WB said. Likewise, the cost of borrowing in developing economies is estimated to remain high due to high interest rates, which have reached their highest level in four decades.

Projections for this year place Latin America as the lowest growing region in the world, behind the 2.4% expected for Europe and Central Asia, 3.5% for the Middle East and North Africa, 3.8% for Sub-Saharan Africa, 4.5% from East Asia and the Pacific, and 5.9% from South Asia.

The growth of Brazil and Mexicowhich in both cases exceeded forecasts in 2023, could slow down this year from 3.1% to 1.5%, and from 3.6% to 2.6% respectively.

Instead Argentinawhich had an economic recession of -2.5% in 2023, could expand its activity to 2.7% this year, like Haiti, which would go from -2.5% to 1.3%, and Chilifrom -0.4% to 1.8%.

Among Latin American countries, the Dominican Republic will register the highest GDP performance in 2024, 5.1%; followed by Panama, with 4.6%. Costa Rica, meanwhile, will have a growth of 3.9%; Paraguay 3.8%; Guatemala 3.5%; Uruguay, Honduras and Nicaragua of 3.2%; Peru 2.5%; and Colombia 1.8%, in accordance with WB forecasts.

Ecuador It is located at the lowest level of forecasts, with economic growth estimated at 0.7% for 2023.