The Russian invasion of Ukraine reduces growth expectations for Latin America between 2022 and 2024, the Inter-American Development Bank (IDB) predicted on Friday.
The growth scenarios for each of the countries depend on several factors, from their commercial links with Russia to their level of indebtedness, but in general the IDB expects it to decrease compared to the pre-war scenario.
In the worst case, growth would slow from 2.1% to 1.2% in 2022, would be –0.4% (instead of 2.4%) in 2023, would recover in 2024 to 1, 3% (instead of 2.2%) “to later converge towards long-term growth of around 2.5%,” says the macroeconomic report for Latin America and the Caribbean 2022.
On the fiscal front, the report considers that the war will raise the debt ratio.
Russia is an important market for several of the products that Latin America and the Caribbean exports, such as dairy products and meat (in the Southern Cone, except Brazil) and fruits.
Around 20% of the region’s total fertilizer imports come from Russia, as do more than 5% of total iron and steel imports.
The high price of oil and grains will benefit exporters, while importers, particularly those in Central America and the Caribbean, will suffer higher price increases.
