“The region is returning to the low-growth trend already observed in the pandemic with great force, and this dynamic, accompanied by high inflationary pressures, is challenging for economic policies in the region,” Daniel Tettleman said at Tuesday’s conference. • Director of the Economic Development Division of the Economic Commission for Latin America and the Caribbean.
The Economic Commission for Latin America and the Caribbean has projected that the GDPs of 16 countries in the region – including Mexico – will not return to pre-pandemic levels in 2022. Tittelman advances: “The real level of the Mexican economy is similar to what it was in 2018 and we expect that Mexico is restoring its pre-pandemic activity level until 2024.”
This scenario runs the risk of increasing poverty and inequality, as well as increasing social conflict. According to Tittelman, investment has become a structural obstacle in the region.
“Investment is the most decelerating variable. Consumption is what has kept the dynamic, but it is also starting to slow down.”
Positive news for the region, and especially for Mexico, is the accommodation shown by remittances, which have continued to increase, helping consumption to continue its dynamic.
The two main partners, such as China and the United States, in the region have low economic growth and this will reduce trade demand this and next year.
An increase in the prices of commodities such as hydrocarbons, food and fertilizers is slowing global and regional trade, as well as increasing inflationary pressures.
“It generates strong social problems given the high probability of global famine,” says Tettleman.
On the other hand, inflationary pressures lead to more restrictive monetary policies in the developed world.
“Central banks have been cautious with increasing interest rates due to a greater acceleration in recent months and persistent inflation,” said the expert at the Economic Commission for Latin America and the Caribbean.
This has increased country risk in the region, particularly in El Salvador, Argentina, Ecuador and Honduras.
ECLAC highlights that increases in fuel and food prices are import variables from the highest inflation in Latin America, which stood at 8.4% through June 2022.
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