Regional economic activity in Latin America and the Caribbean is expected to grow by 5.2% in 2021 and 2.9% in 2022, according to the World Bank in its June 2021 Global Economic Outlook, which was presented yesterday in Washington, USA. Within this framework, the World Bank maintained the growth forecast for Paraguay at 3.5% and expects expansion through 2023.
The agency ratified its forecast published last March for the Paraguayan economy and expects a recovery in 2022 of 4.0%, to then close 2023 at 3.8%, taking into account the health situation of all countries.
The region remains heavily affected by the COVID-19 epidemic and cases have risen sharply after slowing in early 2021. Brazil, in particular, is struggling with outbreaks of variants that not only infect people, but renew infections.
In the first half of the year, traffic restrictions were tightened in countries such as Argentina, Barbados, Brazil, Colombia, Ecuador, Paraguay, Peru and Uruguay, hurting economic activity, especially in the service sector. Moreover, vaccination between countries is uneven.
Regional GDP growth is projected at 5.2% in 2021, assuming moderate progress in vaccine distribution in most countries, fewer restrictions on circulation, positive secondary effects from advanced economies and an increase in commodity prices.
Additionally, it is estimated that growth in the region will decline by 2.9% in 2022. It will take a significant portion of the region a long time to fully recover and return to pre-pandemic levels of production. The region’s per capita GDP is expected to decline by 1.5% in 2022 compared to its level in 2019.
The Brazilian economy is expected to grow by 4.5% in 2021, aided by a new round of emergency payments to households and benign domestic and international credit conditions. In contrast, growth in Argentina is expected to rebound by 6.4% in 2021, while Colombia’s economy is expected to expand by 5.9% this year. Chile’s economy is expected to expand by 6.1% and Peru to grow by 10.3% this year.