Latin America Advisor 2023-09-20 – Inter-American Dialogue

LATIN AMERICA ADVISOR

A daily publication Of the dialogue

September 20, 2023

What Is Holding Back the Region’s Economic Growth?

Latin America and the Caribbean are expected to see lower growth than the world average next year. Lima is pictured, where Peru’s central bank has estimated growth of 0.9 percent this year and 2.2 percent next year. // File Photo: Vengador1 via Creative Commons.

Q

Latin America and the Caribbean are forecast to see economic growth of 1.5 percent next year, slightly below the 1.7 percent expected for this year, the United Nations Economic Commission for Latin America and the Caribbean said Sept. 5 in its annual Economic Survey. That level is below the 3 percent global growth level that the International Monetary Fund expects for 2024. What are the main factors holding back the economies of Latin America and the Caribbean? In the region, which economies will do best, and which will lag behind in the coming year? Which industries will thrive in the year ahead and which will struggle, and why?

A

Pedro Francke, former Peruvian finance minister: “Latin America has had lower growth than the world average over the last four decades, a performance aggravated after the international financial crisis of 2009. It was also a region hit especially hard by Covid-19, in terms of mortality and GDP. So, unfortunately, the low growth projections for this year and next are not a surprise, none of the six large Latin American economies shows significant growth for 2023 and 2024 and, except for the rebound in tourism, no sector stands out with greater dynamism. There are short-term factors in this situation, such as increased interest rates for anti-inflationary purposes, the higher cost of debt and fiscal adjustments focused on reducing expenditures. Together, they configure a framework of contractionary macroeconomic policies that could be reviewed, especially when inflation shows a clear downward trend. There are also important long-term…”

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ABOUT THE LATIN AMERICA ADVISOR

The Inter-American Dialogue publishes the Latin America Advisor every business day for a distinguished membership of informed corporate leaders, scholars, and government officials invested in Latin America’s development and future. The Advisor‘s highly regarded Q&A section covers questions submitted by subscribers themselves. Commentators regularly include heads of state, business leaders, diplomats, economists, analysts, and thought leaders from around the world. Many of the world’s largest and fastest-growing companies subscribe to the Advisor. To subscribe, click here. For terms and conditions, click here. For more information, contact Gene Kuleta, editor of the Advisor, at gkuleta@thedialogue.org.

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Gene Kuleta
Editor
P. 202.463.2920
E. gkuleta@thedialogue.org

Carl David
Goette-Luciak
Reporter

Nili Blanck
Reporter

board of advisors

Diego Arria
Director,
Columbus Group

Merike Blofield
Professor of Political Science,
University of Hamburg

Devry Boughner Vorwerk
CEO,
DevryBV Sustainable Strategies

Joyce Chang
Global Head of Research,
J.P. Morgan

Marlene Fernández
Corporate Vice President for Gov’t Relations,
Arcos Dorados (McDonald’s)

Peter Hakim
President Emeritus,
Inter-American Dialogue

Donna Hrinak
Director,
Adtalem Global Education

Jon E. Huenemann
Council Member,
GLG Inc.

James R. Jones
Chairman,
Monarch Global Strategies

Craig Kelly
Senior Director,
Int’l Gov’t Relations,
Exxon Mobil

Barbara Kotschwar
Professor of Political Economy,
Georgetown University

John Maisto
Director,
US Education Finance Group

Nicolas Mariscal
Chairman,
Grupo Marhnos

Thomas F. McLarty III
Chairman,
McLarty Associates

Beatrice Rangel
Director,
AMLA Consulting

Ernesto Revilla
Head of Latin American Economics, Citi

Gustavo Roosen
President,
IESA

Andrés Rozental
President, Rozental &
Asociados

Shelly Shetty
Managing Director,
Sovereigns, Fitch

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