In 2024, experts predict Latin America’s GDP will grow by 1.6%, marking its slowest rate since the 7.3% contraction in 2020 and a decrease from the previous year’s 2.2%.
According to the UN’s DESA, Brazil, Mexico, and Argentina, the region’s major economies, are seeing slower growth.
The economic outlook for Latin America and the Caribbean is weakening, with high inflation and limited policy options.
DESA highlights the need for increased investment in social and climate challenges.
Experts anticipate a rebound to 2.3% in 2025 following the slowdown in 2024. Meanwhile, the global economy’s growth is also slowing to 2.4%, down from 2023’s 2.7%.
In 2023, the region’s GDP growth exceeded expectations due to strong consumer and investment resilience, but structural and policy challenges persist.
Tighter financial conditions in 2024 will dampen internal demand and cause slower growth in China and the U.S., which will affect exports.
Less developed countries globally might see a 5% growth in 2024, up from 2023’s 4.4%, but still below the 7% Sustainable Development Goals target.
Developed economies are likely to grow by only 1.3% in 2024, with the U.S. at 1.4% and the European Union at 1.2%.
Latin America’s key economies are weakening, with Brazil’s growth expected at 1.6%, Mexico’s at 2.3%, and Argentina possibly contracting by 3.3%.
Experts expect Guyana to be the fastest-growing economy.
Inflation in the region is projected at 4.3% in 2024, moderating to 3.5% in 2025. The region needs to reduce tax evasion and improve tax systems to meet these challenges.
Governments should implement policies to boost growth, including countercyclical and active industrial policies, and expand social welfare and climate resilience.
Projections show Guyana as the region’s top-growing economy, expected to expand by 25.3% this year and 12.2% in 2025 due to an oil boom, despite its dispute with Venezuela.
Panama and the Dominican Republic are set to grow by 4.2%, with Paraguay close behind at 4% and Costa Rica at 3.7%.
Honduras and Guatemala are also on the rise, expecting growths of 3.3% and 3.1%, respectively.
Conversely, Argentina and Haiti face significant challenges, projecting growths of -3.3% and -0.4%.
Uruguay, Venezuela, Ecuador, Peru, Mexico, and Chile show promising prospects, expecting to grow by 2.8%, 2.7%, 2.4%, 2.3%, and 2.2%, respectively.
In 2024, restrictive monetary conditions and a slowdown in external demand will limit export growth.
Internal vulnerabilities and political uncertainties will affect investment, significantly risking the region’s growth and possibly reverting to pre-pandemic low growth patterns.
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This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief