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The Gross Domestic Product of Latin America would grow 1.2% this year, less than expected in December, according to projections by the Economic Commission for Latin America and the Caribbean (Cepal), mainly due to “growing external uncertainties and internal restrictions”. .
ECLAC, the United Nations body that measures the performance of the region’s economy, warned that the scenario for 2023 is a little more complex than expected a few months ago, when GDP growth of 1.3% was expected.
The reason, according to the multilateral institution based in Chile, has to do, among other factors, with “the financial turbulence observed at the beginning of March”, such as the bankruptcy of various banks, including Silicon Valley Bank, in the United States.
The economies of the region, adds the report, are facing a complex external scenario this year, marked by weak growth in economic activity and world trade, while interest rates should remain at high levels despite the slowdown in the inflation.
Within the projections, Venezuela, Panama and the Dominican Republic stand out as the nations with the best performance.
Brazil, Latin America’s largest economy, is likely to grow 0.8% this year, while the second largest economy, Mexico, would expand 1.5%. Meanwhile, GDP is expected to fall in Chile and Argentina by 0.3% and 2%, respectively.
In the middle of the table are El Salvador, Uruguay, Peru, Ecuador and Bolivia, all with an estimated growth of 2%, followed by Cuba and Mexico, both with an expected increase of 1.5%, and Colombia, with 1 ,2%.
“The growth projection for 2023 is subject to downward risks given the possibility that the turbulence in the global banking system may reappear and intensify, which would result in a more persistent tightening of global financial conditions,” ECLAC warned.
Latin America, the most unequal region in the world and the one most affected by the pandemic, grew 6.9% in 2021, due to the rebound effect after the 6.8% collapse registered in 2020, the biggest recession in 120 years.
With EFE and Reuters
