MercoPress. South Atlantic News Agency

IDB forecasts gloomy 2023 for Latin America, Caribbean

Goldfajn spoke of “overlapping crises”

The Interamerican Development Bank (IDB) has issued a report forecasting growth for the region in 2023 will barely stand at 1%, much lower than similar studies from the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Monetary Fund (IMF).

“Growth prospects for the region in 2023 look less promising than the recovery period of 2021 and 2022. This could increase the risk of widening gaps associated with the region's triple challenge of improving social conditions, strengthening fiscal accounts, and promoting long-term growth,” the IDB report says.

“In general, 2023 will be difficult for Latin America and the Caribbean, given the complexity of the global scenario and its significant uncertainties,” with 1% growth if no new difficulties arise, said the IDB in its Macroeconomic Report 2023, presented by its chief economist, Eric Parrado, on the closing day of the organization's annual general meeting in Panama.

“On the side of the specific economic growth of Latin America and the Caribbean what we estimate for 2023 is that growth will be around 1% [...], which for the development challenges of our countries is very low,” said Parrado.

The IDB's projection is lower than the 1.8% growth forecast for the region this year by the International Monetary Fund (IMF) and the 1.3% predicted by the UN Economic Commission for Latin America and the Caribbean (ECLAC).

The IDB even finds it possible that 0% growth is attained this year if there is any financial shock, Parrado also pointed out.

The new document was released one day after the IDB's new president, the Brazilian Ilan Goldfajn, said the economic outlook for Latin America and the Caribbean was overshadowed by “overlapping crises.”

”From the (Covid-19) pandemic to the Russian invasion of Ukraine, with higher debts and record inflation, food, and energy insecurity and, of course, the climate crisis,” Goldfajn stressed.