Latin America: GDP Growth Expected at 2.1%
ECLAC revised its estimates upwards, identifying global volatility, the cost of raw materials, and high interest rates in developed countries as the main impediments to more dynamic growth
The Economic Commission for Latin America and the Caribbean (ECLAC) revised economic growth upward. Growth in the region will average 2.1% in 2024, resulting from combined growth of 1.6% in South America, 2.7% in Central America and Mexico, and 2.8% in the Caribbean.
“The region’s projected growth in 2024 remains on the low growth path seen in recent years, and the big challenge is how to transition to higher, more dynamic and inclusive growth,” commented the UN Commission.
The scenario is that growth in economic activity and world trade will be below historical averages and interest rates in developed countries, which, while remaining high, impose higher financing costs on developing countries. The focus is on the risk factors that characterize global markets, from geopolitical tensions that are pushing to reshape the value chain to rising commodity prices that could further delay the decline in the value of money. High rates could further increase the debt burden of emerging economies.
“To resume growth, ECLAC insists on the need to improve the region’s productivity and increase investment in physical and human capital,” the Commission wrote in a statement. “To achieve this goal, the region must not only invest more, but invest better. This involves introducing new technologies, promoting cluster initiatives and best business practices, facilitating deep improvements in capital accumulation and the effective use of the economy’s social and environmental capital.”
Infrastructure, telecommunications, digitalization, research, and development were identified as key sectors to be stimulated. This must be accompanied by improvements in health programs and the adaptation of education systems to meet the challenges of digitalization and automation.
