Latin America And Caribbean they continue to be crushed under the weight of well-founded stereotypes about their economy. This Economic Commission for Latin America and the Caribbean (ECLAC) reported this Thursday that it will continue this year even though that part of the world is far from sources of international conflict such as Ukraine, Russia and China. low economic growth and little participation international trade. According to that ECLAC report“The increases in interest rates around the world are also added to this figure. financial turmoil This situation observed at the beginning of March, uncertainty and volatility in financial markets“. Countries living in the region in between growing external uncertainties and internal constraintsso expected Economic growth in the region remains at a modest 1.2%.
Despite this global negative message, the reality is that only ArgentinaChile and Haiti are the only countries in Latin America whose economies will collapse in 2023.. ECLAC expects Argentina’s gross domestic product (GDP) to contract by 2% compared to the 1% growth it forecast last December. The International Monetary Fund (IMF) announced that Argentina will be in a difficult position, cutting growth from 2 percent to 0.2 percent for this year.
Brazil It ranks as the least growing country in the region in 2023, remaining at 0.8% (one-tenth less than the December forecast). However, among the lobbies of internationalized companies, Brazil is considered a country to be considered as an investment target market, as a result of protectionism, which means it is necessary to have an industrial establishment in order to sell in Brazil. high tariffs.
According to ECLAC, Colombia will experience a slowdown in its economy with a GDP growth of only 1.2%. protests Peru or Bolivia’s economic instability will have an impact on its growth and in either case the outlook will decline to 2%. Uruguay or Ecuador remain the same. By contrast, Paraguay will outperform South America, up two-tenths of its growth, up to 4.2%.
Finally, activity in Mexico will be better than expected with 1.5% growth. Mexico is one of the countries preferred by Spanish companies to invest and has good prospects for this year. Accompanied by other Central American countries such as El Salvador, Costa Rica or Panama, which will grow more than expected (up to 2%, 2.7% and 4.6% respectively).
as in the rest of the world, Although the effects of the restrictive policy on private consumption and investment are evident, inflation in the region shows a slowing trend this year. On financial matters, the ECLAC report states that the authorities have little maneuvering area while public debt levels remain high. “In the context of high demands for public expenditure, measures will be necessary to strengthen fiscal sustainability and expand fiscal space by strengthening the collection and redistribution capacity of tax policy,” the agency said.
This regional commission The United Nations predicts that all subregions will show lower growth in 2023 compared to 2022. South America will grow by 0.6% in 2023 (3.8% in 2022), the group consisting of Central America and Mexico will grow by 2.0% (compared to 3.5% in 2022) and the Caribbean ( excluding Guyana) will grow 3.5% (vs 5.8% in 2022).
South America will be affected by the drop in prices of basic products and space restrictions. domestic policies must support the activity. High inflation has affected real income and affects private consumption and investment in countries.
The main reason for the expected slowdown in the Caribbean economies in 2023 is that inflation affects both real income and, with it, consumption and inflation. production costnegatively affects the competitiveness of both goods and tourism exports.
Finally, for the economies of Central America and Mexico, this year’s growth represented a slowdown compared to 2022, although in some cases there were upward revisions compared to ECLAC’s estimates at the end of last year. growth UNITED STATES OF AMERICA, According to ECLAC, the main trading partner and the first source of remittances from countries in the region should improve both foreign sector and private consumption across the region. The reduction in energy prices should have a positive effect.