They raise the growth forecast for Latin America to 1.7%

The Economic Commission for Latin America and the Caribbean (ECLAC) on Tuesday it raised its regional GDP growth projection for 2023 to 1.7% from 1.2%, estimated last April, but warned that the global macroeconomic scenario remains “complex”.

The United Nations agency, based in Santiago de Chile, explained in a new report that the world economy “remains on the path of low economic growth” and that “developed countries will continue with their contractionary monetary policy”, despite the fall in the inflation rate.

“We cannot expect a significant drop in foreign interest rates this year, and financing costs for our countries will remain high,” Indian ECLACwhich predicts regional GDP growth of 1.5% for 2024.

Low growth in 2023 and 2024 will result in a slowdown in employment, which will grow by only 1.9% in 2023 and 1.1% in 2024, according to the document “Economic Study of Latin America and the Caribbean, 2023 Financing the Transition”. sustainability: investing for growth and coping with climate change”.

The region will also have “limited” fiscal space, due to high levels of public debt, increases in internal and external rates and falling tax revenues as a result of lower growth, the agency said.

“Latin America and the Caribbean’s low growth could be exacerbated by the negative effects of worsening climate shocks, if the climate change adaptation and mitigation investments that countries require are not made,” he said during the presentation of the study ECLAC Executive Secretary, José Manuel Salazar-Xirinachs.

Argentina, Haiti and Chile: The only ones to decrease
Panama (5.1%), Paraguay (4.2%) and the Caribbean Islands (4.2%, not including Guyana) will lead economic growth this year, followed by Costa Rica (3.8%), the Dominican Republic (3. 7%). Honduras and Guatemala, both with growth of 3.4%.

In the middle of the table are Venezuela (3.2%), Mexico (2.9%), Brazil (2.5%), Nicaragua (2.4%), Ecuador (2.3%), Bolivia (2.2%). ) and El Salvador (2.1%). .

In the tail, but still with positive figures, are Cuba (1.8%), Peru (1.3%), Colombia (1.2%) and Uruguay (1%), while Chile (-0.3% ), Haiti (-0.7%) and Argentina (-3%) is the only one that will decrease this year, according to the United Nations organization.

Latin America, the most unequal region in the world and most affected by the pandemic, grew by 6.9% in 2021, recovering from a 6.8% decline in 2020, the worst recession in 120 years.

The slowdown in the region began in the second half of 2022, which closed with an estimated growth of 3.7%, according to ECLAC.

The cost of air conditioning
In the second part of the report presented this Tuesday, the agency analyzes the consequences of climate change on regional economies and possible financial mechanisms to facilitate investments in order to have resilient economies.

“As a result of worsening climate shocks, in 2050 the GDP of the six countries in the region, highly exposed to the risks of climate change, could be between 9% and 12% lower than the one corresponding to the trend of the growth scenario,” the document indicates.

In order to compensate for these losses, ECLAC added, additional investments “of an exceptionally large size, between 5.3% and 10.9% of GDP annually” would be required.

“Given the challenges of boosting growth and dealing with climate change, it is crucial to boost public and private investment. Public investment in the region is low compared to advanced economies and even compared to other developing regions,” he said. Salazar-Xirinachs.