“While inflationary pressures have slowed, policy rates can be expected to remain high throughout 2023 in major developed economies,” the organization said in a statement.
By region, the commission sees lower growth; South America will register growth of 0.6% (3.8% in 2022), Central America and Mexico 2% (3.5% in 2022) and the Caribbean, excluding Guyana, 3.5% (5.8% in 2022).
The country that will have the highest growth will be Guyana, with 37.2%, followed by Antigua and Barbuda (9.5%), Venezuela (5%) and Panama and the Dominican Republic (4.6% each).
For Mexico, ECLAC forecasts a growth of 1.5% and for Brazil 0.8%; while for Argentina -2% and -0.3% for Chile.
ECLAC explained that the growth of the United States, the main trading partner and main source of remittances for some countries, will affect consumption and the external sector; In addition, the best energy prices will play in favor of the economy, since several countries are energy importers.
South America will be affected by the drop in the prices of basic products. In addition, high inflation has effects on private consumption and investment.
In the Caribbean, inflation has affected real income and consumption, as well as production costs; with a negative effect on the competitiveness of exports of goods and tourism.
However, the Commission pointed out that the countries of the region face this year a “limited space” for fiscal and monetary policy.
Although the increases in the reference interest rates are expected to stop, the effects of the restrictive policy on private consumption and investment “will be felt more strongly this year,” the commission recalled.
In addition, the global financial volatility, product of the problems in banks of developed countries and the fact that inflation will continue at high levels, does not see a cycle of “monetary relaxation” in the region.
As far as fiscal policy is concerned, the authorities have little room for manoeuvre, as public debt levels remain high. “In a context of high demands for public spending, measures will be required to strengthen fiscal sustainability and expand fiscal space by strengthening the collection and distribution capacity of tax policy,” the agency said.
