The UN Economic Commission for Latin America and the Caribbean (ECLAC) projects a 2.7-percent average economic growth for the region in 2022, almost one point above the previous forecast in April.
However, the commission notes that a challenging context of binding macroeconomic constraints magnified by the repercussions of Ukraine’s invasion by Russia is leading Latin America back to its low-growth course.
Between 2014 and 2019, Latin America grew at a meager 0.3 percent a year. Inflation is an even more pressing issue this time: it reached a regional average of 8.4 percent as of June 2022, more than double the average rate recorded in the 2005-2019 period.
ECLAC forecasts that South America will grow 2.6 percent (in comparison with 6.9 percent in 2021); the group made up of Central America and Mexico will expand 2.5 percent (against 5.7 percent last year); the Caribbean – the only subregion that will grow more than in 2021 – will experience a 4.7 percent expansion in 2022.
Commodities trade will not offer the region a lifeline this time around. According to ECLAC, while some countries in the region — primarily net energy exporters — have benefited from high prices on international markets, most countries are experiencing declines in their terms of trade (the number of import goods an economy can buy per unit of exports), together with slowdowns in exports.
That is, exports are not offsetting import needs.
Guyana, Venezuela, Colombia, and Uruguay are the South American countries that will grow the most this year, according to ECLAC projections.