The outlook for Latin America and the Caribbean remains complicated. The war in Ukraine, rising inflationary pressures and reduced macroeconomic policy support represent major headwinds to recovery,” the organization said in a new report released yesterday by the United Nations.
Latin America and the Caribbean will grow 2.1% this year, according to a new estimate presented today by the United Nations, which revised slightly downward its previous projections due to the impact of the war in Ukraine and inflation.In January, the UN already warned of a clear slowdown in the region, which grew by nearly 7% in 2021.
The economic slowdown in the United States and China – key trading partners for the region – and higher borrowing costs also dampen the outlook for the region. Despite this, the underperformance in the case of Latin America is much lower than that announced by the United Nations for the world’s major economies.
The continent’s economic situation is further complicated by the sharp rise in energy and food prices, which are driving inflation, which is expected to reach 14.6% in the region this year. The problem will particularly affect the most vulnerable households and increase the risk of food insecurity and social unrest.Another factor to take into account is that the war in Ukraine is likely to affect agricultural production in countries such as Argentina, Brazil and Uruguay. As a result of problems in the supply chain and the higher fertilizer prices caused by the conflict.Despite this, the growth forecast for South America was revised slightly upwards (1.8%), which contrasts with a clear downgrade for Mexico and Central America, from 3.4% to 2.2%. On the other hand The Caribbean will grow at a very good rate of about (11.2%) thanks to the recovery of tourism after the blow caused by the pandemic.
Since the beginning of the year the organization already saw several factors suggesting a slowdown in growth in Latin America that were not apparent in other regions, where a more significant advance was expected. Michele Bachellet, United Nations High Commissioner for Human Rights, invited governments to “strengthen social protection and financial aid programs, invest in sustainable development and increase job offers, because what I see is distress in Latin America and the Caribbean”.