ECLAC downgrades growth projections for Latin America, Caribbean

The Economic Commission for Latin America and the Caribbean (ECLAC or CEPAL) on Tuesday revised its regional growth projection for 2024 downwards, trimming 0.3 points off its previous forecast.

According to the body, Latin America and the Caribbean as a whole will grow 1.8 percent, due to an "uncertain international context." Previously, it predicted 2.1 percent growth this year.

The region is expected to "continue on a low growth trajectory" due to "a high level of inflation and interest rates that remain high at the global level," ECLAC said in a report.

"This situation may be aggravated by a possible exacerbation of geopolitical and trade tensions, as well as by the worsening effects of climate change," the Santiago-based UN agency warned.

At the regional level, ECLAC said that growth "is hampered by a loss of household purchasing power" and by "the restrictive stance of monetary policy" – with high rates – which affects domestic demand and discourages investment.

According to the report, over the decade-long period of 2015-2024, Latin American countries have shown low economic growth, recording an average rate of 0.9 percent.

ECLAC projects regional growth for 2025 of 2.3 percent.

Breaking down the forecasts by nations, Brazil – the region’s largest economy – will grow by 2.3 percent this year, according to the body. Colombia's projection remained unchanged at 1.3 percent.

Hoover, both Mexico and Argentina received trimmed forecasts. GDP growth of 1.9 percent is expected in the former, with the first year of President Javier Milei’s government set to end with a contraction of 3.6 percent, said ECLAC.

Improved forecasts were issued for Venezuela (five percent), Chile (2.6 percent), Peru (2.6 percent), Costa Rica (four percent), Nicaragua (1.9 percent), El Salvador (3.55 percent) and the Dominican Republic (5.2 percent).

– TIMES/AFP