MercoPress. South Atlantic News Agency

ECLAC reports economic slowdown for 2022; will be worse next year

Paraguay and Haiti had negative progress figures

The Economic Commission for Latin America and the Caribbean (ECLAC) forecast Thursday that Latin American and Caribbean countries will grow 3.7% in 2022, which represents a setback from last year's 6.7%.

In its “Preliminary Overview of the Economies of Latin America and the Caribbean 2022,” ECLAC also foresees further stagnation with a 1.3% GDP growth projected for 2023.

According to ECLAC, the monetary policy responses adopted worldwide in 2022 amid global inflation, have caused increases in financial volatility and levels of risk aversion and, therefore, have induced lower capital flows to emerging economies.

The study also showed the exhaustion of the rebound effect in the 2021 recovery, in addition to the effects of restrictive monetary policies, greater fiscal spending limitations, lower levels of consumption and investment, and a deteriorating foreign scenario.

In presenting the report, ECLAC's Executive Secretary José Manuel Salazar-Xirinachs recalled that by the end of 2022 a growth of 3.7 percent is forecast and explained that the slowdown in 2023 will be associated with a decline in economic growth and world trade.

ECLAC also predicted lower inflation in advanced and emerging economies for 2023, but still far from pre-pandemic levels.

The international agency also reported an increase in informal jobs coupled with a drop in real wages, while the gap between men and women in the labor markets remained.

Governments are expected to have financial difficulties in 2023 due to high levels of fiscal indebtedness. Hence, ECLAC called for innovative public policies.

According to ECLAC's report, the economies with the best performances during 2022 were Venezuela (12 % of GDP), Panama (8.4), Colombia (8), Uruguay (5.4), Dominican Republic (5.1), and Argentina (4.9), the Caribbean islands (4.5), Costa Rica (4.4), Honduras (4.2), Guatemala (4), Nicaragua (3.8), Bolivia (3.5), Mexico and Brazil (tied at 2.9), Ecuador and Peru (tied at 2.7), El Salvador (2.6), Chile (2.3) and Cuba (2).

According to the document, Paraguay and Haiti showed negative figures: (-0.3 and -2 %respectively). The report does not include Guyana, which is experiencing an oil boom.