EqualOcean has learned that on May 9th, Economic Commission for Latin America and the Caribbean (ECLAC) released its latest outlook report, updating its forecast for economic growth in Latin America and the Caribbean region in 2024, raising the projected economic growth from 1.9% in December last year to 2.1%. Analysis indicates that the progress in China-Latin America bilateral relations has provided support for Latin American countries to address economic challenges.
ECLAC pointed out that despite the upward revision in economic growth expectations for Latin America and the Caribbean region, the overall economic situation in the region remains on a low-growth trajectory.
According to World Bank analysis, factors contributing to the slowdown in economic growth in Latin America and the Caribbean region include low investment and domestic consumption levels, rising interest rates, high fiscal deficits, and declining commodity prices. Additionally, geopolitical tensions, disruptions in Suez Canal transportation, El Niño phenomena, among others, may further constrain economic growth in the region.
ECLAC highlighted that public debt in Latin American countries is at a high level. The high-interest rate environment and economic slowdown have led to declining tax revenues, thereby limiting fiscal policy space and putting public expenditure in distress. With reduced investment, the impetus to create employment weakens, posing severe challenges to the macroeconomic policies of some Latin American countries.
Despite the overall slowdown in the Latin American economy, there are significant differences among economies in the region. Brazil and Mexico have experienced economic growth rates exceeding previous expectations. According to statistics from the Brazilian Ministry of Finance, the Brazilian economy grew by 2.9% in 2023. The IMF previously predicted that due to the robust development of agriculture and livestock, the recovery of the service sector, and strong growth in the domestic consumption market, the Brazilian economy has exceeded expectations and is expected to return to its position as the ninth-largest global economy by the end of 2023. Data released by the Mexican National Institute of Statistics and Geography showed that Mexico's GDP grew by 3.2% in 2023, slightly lower than the 3.9% growth rate in 2022. Significant drivers of economic growth in Mexico come from foreign investments from countries such as China and the United States.
The latest release of the "Latin America Yellow Book: ANNUAL REPORT ON LATIN AMERICA AND THE CARIBBEAN" pointed out that since 2022, the overall economic growth rate in Latin America and the Caribbean region has slowed down, and economic risks have continued to accumulate. However, the steady progress in China-Latin America bilateral relations and significant cooperation achievements have provided support for Latin American countries to address economic challenges and have opened up new cooperation opportunities in multiple fields.