By: Staff Writer
April 23, 2024
The Economic Commission for Latin America and the Caribbean (ECLAC), in a new report, said that Latin America and the Caribbean is experiencing “very slow growth,” underpinned by various international crises.
The report, “The Challenge of Accelerating the 2030 Agenda in Latin America and the Caribbean,” detailed that due to the various crises that have beset the region over the past several years including the slow economic and trade growth, climate change, forced migrations, geopolitical conflicts and the recent humanitarian crises caused by the ongoing wars in Europe and the Middle East, has made the regional landscape more problematic.
ECLAC added: “The regional picture is no less problematic. As a result of the global circumstances and the region’s own structural constraints, Latin America and the Caribbean is experiencing very slow growth and a high prevalence of substandard employment, leading to a deterioration in levels of social well-being and material progress. Short-term challenges in the region are compounding this situation, which is delaying progress towards the SDGs there.
“Given this difficult regional and global situation, the design and implementation of innovative policies with a long-term strategic vision need to be pursued more vigorously if there is to be progress towards the SDGs in Latin America and the Caribbean. This means having access to information that enables the challenges facing the region to be more clearly identified and measured with a view to making evidence-based decisions and designing desirable future scenarios and the pathways towards them.”
It also said: “Latin America and the Caribbean has remained on a path of low growth with respect to the historical average. Compared with 2022, growth in 2023 was lower in all subregions, with the sharpest downturn in South America. Although sovereign debt levels have come down, they remain high; this substantial debt, added to the increased cost of external and internal debt financing, has continued to squeeze fiscal space.
“On the monetary policy front, inflation has continued to subside, but countries are maintaining their contractionary stance, wary of the effects that interest rate cuts could have on capital flows and exchange rates, since, as mentioned, developed countries’ interest rates remain high. Investment and job creation capacity is also slowing in all sectors, while high levels of labour informality persist along with wide gender gaps, in particular in labour participation and unemployment rates.”
It also said: “Latin American and Caribbean countries are facing challenges stemming from both the global economic situation and regional trends. The globalization that the world has known since the 1990s has changed and will continue to do so. The multilateral system based on clear and predictable rules, with highly fragmented global production chains predicated on a quest for efficiency, is currently losing ground to another system, in which political rather than economic concerns are prioritized in decision-making. While, in the past, interdependency was celebrated and multilateral organizations were entrusted with settling disputes between sovereign States, the current system is less focused on rules and more on strategy and power.
“The deceleration of global growth has been influenced by the transformation of global production chains, the conflict between the Russian Federation and Ukraine, and intensified productive and technological competition among major global powers, factors which have heightened volatility on international financial and commodity markets. This has fueled global inflationary pressure worldwide and prompted central banks to collectively speed up monetary policy tightening in an attempt to anchor inflation expectations, substantially diminishing capital flows to emerging markets.”