ECLAC cuts growth estimate for Mexico to 1.4% in 2024

ECLAC highlighted in its report that the region continues to have a low capacity for growth and slow job creation. Furthermore, economic activity is driven by consumption, with a low participation of investment and no contribution from net exports.

It warns that the region in general is losing weight in the contribution to global growth while that of other developing regions is increasing.

He insisted that to confront the trap of low capacity to grow, significant financial resources are required, as well as the implementation of productive policies that boost investment and productivity.

Employment is expected to continue growing slightly in 2025, coupled with a labor participation rate that is still weak compared to that recorded before the pandemic and persistent gender inequality.

The organization warned of risks such as the intensification of geopolitical and commercial tensions, which could affect the international price of raw materials, as well as renewed frictions in transport routes and logistics.

“Given the economic situation projected for the end of 2024 and 2025, the macroeconomic policy space would remain limited, in a context of low contribution from external demand, still high prices of raw materials and difficult financing conditions, among other factors. which tends to alter macroeconomic balances,” he noted.

The countries of Latin America and the Caribbean maintain a downward trend in inflation which, added to monetary relaxation in the United States, has allowed nations with inflation goals to reduce their reference interest rates this year, although in a “heterogeneous” manner. and cautious.”

ECLAC highlighted that the prospects for investment next year remain discouraging amid the weakness of public spending.

“Gross fixed capital formation is expected to continue contracting, which calls into question its role in sustaining the medium and long-term growth of the region’s economies,” he indicated.

With information from Reuters

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