World Bank raises 2022 GDP growth forecast for Latin America from 2.5% to 3%

The World Bank on Tuesday revised its forecast upward for gross domestic product (GDP) growth in Latin America and the Caribbean for 2022.

Specifically, the figure was raised to 3%, citing that the region has “regained some degree of normalcy” and its economies have returned to their pre-Covid-19 pandemic economic levels.

In most countries, GDP and employment returned to 2019 levels, although projected growth rates could be described as ‘resilient mediocrity’.

While growth is not expected to exceed the low levels of the 2010s, banking systems appear healthy, and the rising debt burden is manageable for now,” the report said.

The new estimate is 0.5% higher than the June estimate of 2.5% growth through 2022, which was boosted largely by high commodity prices.

Forecasts for the future are still cautiously estimated at this time.

For 2023 and 2024, the growth outlook is 1.6% and 2.3%, respectively.

The figures are lower than the June estimates of 1.9% for 2023 and 2.4% for 2024.

Economic performance over the next two years will be affected by “strong uncertainty” in the world due to the war in Ukraine, rising interest rates in developed countries, and persistent inflationary pressures, it says.

The focus will now be on public spending and taxes.