The Economic Commission for Latin America and the Caribbean (ECLAC) increased its growth projection for the region for 2022 to 3.2%; in August it had estimated an increase of 2.7%. However, by 2023 it foresees a further slowdown and puts average progress at only 1.4%, with the region’s countries subject to significant external and internal restrictions.
The UN agency highlighted the impact of the war in Ukraine on global growth and external demand. Like the rest of the world, Latin America and the Caribbean saw inflationary pressures, volatility and financial costs increase.
In addition, increased investor risk aversion and tighter monetary policy by the world’s major central banks dampened capital flows to emerging markets, including Latin America.
These factors led to depreciations of local currencies and made financing more expensive, leading to a debt crisis.
Unfavourable climate to persist in 2023
According to ECLAC, the…