Latin America and the Caribbean will face a difficult 2023, with an estimate of economic growth of barely 1% due to the “uncertainties” on the global stage, warned this Sunday the Inter-American Development Bank (IDB).
(See: IDB warns of the need for policies to reduce poverty in Latin America).
“In general, 2023 will be difficult for Latin America and the Caribbean, given the complexity of the global scenario and its significant uncertainties.“, with a growth of 1% if no new difficulties arise, the IDB said in its Macroeconomic Report 2023, presented by its chief economist, Eric Parrado, on the closing day of the organization’s annual Assembly in Panama.
“Regarding the specific economic growth of Latin America and the Caribbean, what we estimate for 2023 is that growth will be around 1%, which for the development challenges of our countries is very low.Parrado said.
The IDB projection is less than the 1.8% growth forecast for the region this year due to the International Monetary Fund (IMF) and the 1.3% forecast by the UN Economic Commission for Latin America and the Caribbean (Cepal).
(See: Latin America, close to being a giant in renewable energy).
The IDB Assembly, which culminated this Sunday and which brought together the finance managers of the countries of the region, is being held amid concerns following the bankruptcy of three banks in the United States, including the Silicon Valley Bank, as well as difficulties in First Republic american and swiss Credit Suisse.
The IDB even contemplates the possibility of 0% growth this year in the region if there is any financial ‘shock’, Parrado indicated.
The gloomy Macroeconomic Report was presented one day after the new president of the IDB, Brazilian Ilan Goldfajn, stated that the economic prospects for Latin America and the Caribbean are clouded by “overlapping crises“.
“From the (covid-19) pandemic to the Russian invasion of Ukraine, with higher debts and record inflation, food and energy insecurity and, of course, the climate crisis“, stressed the IDB helmsman, without including in his enumeration the turbulence in the banking sector.
(See: ‘Women are not billing’: this is the economic gap in Latin America).
“Growth prospects for the region in 2023 appear less promising than the recovery period of 2021 and 2022. This could increase the risk of widening the gaps associated with the region’s triple challenge of improving social conditions, strengthening fiscal accounts and promote long-term growth“, says the IDB report.
IDB Assembly in Panama.
EFE
“Countries in Latin America and the Caribbean face a year in which global demand may be depressed – partially offset by China’s reopening after its strict covid-related lockdowns – and high financial costs” by the increase in interest rates, adds.
This panorama “awakens the serious specter of the deterioration of poverty and inequality“, says the report, which predicts that in 2024 the region would grow 2%.
“What we do in the IDB macroeconomic report is have different types of scenarios. So we have the baseline scenario, which is 1% by 2023, but we also have a more stressed scenario, where we consider real ‘shocks’ or financial ‘shocks’Parrado said.
(See: Job outlook in Latin America improves despite economic volatility).
“And, currently, the financial ‘shock’ is somehow associated with the financial situation of some banks in the United States and some banks in Europe“added the chief economist of the IDB.
AFP
