Latin America and the Caribbean GDP will grow by 2.1% in 2022

The Latin America and Caribbean region will have a GDP growth of 2.1% in 2022, well below the 6.2% of last year, affected by low investment and inflationary pressures, evaluated this Wednesday (12) the Commission Economic for Latin America and the Caribbean (ECLAC).

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“We see something very worrying. We came from a growth rate of 6.2% and are going to 2.1%. It will be a very important slowdown in growth across the region,” ECLAC Executive Secretary Alicia Bárcena said during a virtual press conference in Mexico City to present the organization’s forecasts for 2022.

By country, ECLAC estimated in its “Preliminary Assessment of the Economies of Latin America and the Caribbean”, that Brazil, the largest economy in the region, will grow by 0.5%, while Mexico would have an expansion of 2.9%. Argentina, meanwhile, would grow at a rate of 2.2% this year.

By region, ECLAC estimated that the Caribbean will grow 6.1%, driven mainly by the recovery in tourism, Central America, 4.5%, and South America, 1.4%.

– Structural problems –

The organization assured that the region will face a complex year 2022, mainly due to uncertainty about the evolution of the covid-19 pandemic, with reduced investment, slow recovery of jobs, less fiscal space, more inflationary pressures and financial imbalances.

Investment and productivity are “structural problems that continue to condition this possibility of sustaining a recovery beyond what we saw in 2021”, explained Bárcena.

In Latin America and the Caribbean, investment in relation to GDP “is 19.5%, one of the lowest investments in the last three decades and already the lowest in the entire world”, he emphasized.

The average for this sector in developed economies is 22.4% and 26.8% worldwide, he pointed out.

He added that the engine of growth in 2021 “was undoubtedly consumption, to which exports and gross fixed capital formation were added”.

He also highlighted that “the greater number of remittances supported private consumption” in the region, especially in Mexico and Central America, supported by the recovery in the United States.

However, in 2021, employment recovered at a slower pace than economic activity. Thirty percent of jobs lost in 2020 have yet to be regained in 2021, the report added.

– “Long-lasting damage” –

“The pandemic has inflicted lasting damage on the growth of economies”, exacerbated by structural problems prior to the crisis such as “informality, unemployment and scarcity of coverage in social protection systems”, highlighted Bárcena.

She also assessed that global inflationary pressures, due to rising food and energy prices, will continue to affect the region in 2022.

Meanwhile, inequality in the labor market between men and women has deepened in 2021.

“More than 38% of the jobs held by women destroyed during the crisis have not been recovered. In the case of men, the number is 21%”, said Bárcena.

For this year, estimated unemployment rates for the region would be 12.4% for women and 10.2% for men.

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