RIO DE JANEIRO, BRAZIL – Latin America’s economy will advance by 5.2% this year, above the 3.2% forecast in January. However, its growth will depend on “moderate progress in vaccination, the relaxation of restrictive measures and an increase in raw material prices”, said the World Bank (WB) on Tuesday.
However, the Washington-based multilateral organization predicted that the Latin American region’s Gross Domestic Product (GDP) would decline by 2.9% in 2022.
“The region continues to be severely affected by the covid-19 pandemic, and cases have risen sharply after slowing down in early 2021,” the WB indicated in its analysis.
In addition, the agency stressed that in the first half of 2021, restrictions on movement were tightened in countries such as Argentina, Barbados, Brazil, Colombia, Ecuador, Paraguay, Peru, and Uruguay, which, according to the bank, “harmed economic activity”.
Despite these circumstances, the two large regional economies will show solid expansions: Brazil will grow by 4.5% this year, thanks to a new round of direct payments, while Mexico will grow by 5%, driven by the expected boom in U.S. demand manufacturing and services.
Growth in Argentina is expected to rebound by 6.4% in 2021, while Colombia’s economy is expected to expand by 5.9% this year.
Chile is expected to grow by 6.1% and Peru by 10.3 % this year, making it the country with the highest growth rate in the region.
On the other hand, development in Central America is expected to reach 4.8% in 2021, thanks to a steady pace of remittances and increases in commodity prices.
With respect to the Caribbean, where the covid-19 caseload has been relatively low, an expansion of 4.7% is forecast. However, the outlook for most tourism-dependent economies has been revised downward since January, as recovery in that sector is still slow.
However, regional employment has not yet returned to pre-pandemic levels, a context that has led to a loss of income, thus aggravating poverty and food security “in many countries” in Latin America.
The world economy will grow by 5.6% this year, above the % forecast in January. However, it will do so unevenly with a strong rebound in the USA and China in full recovery after the crisis unleashed by the pandemic against a weak expansion in emerging markets.