How Latin American can navigate global risks and emerge stronger
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- 13 Feb 2023
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Latin America is not immune to the compounded crises impacting the world but some favourable conditions offer hopeful prospects for the region.
The World Economic Forum’s Annual Meeting 2023, under the title “Cooperation in a Fragmented World,” takes place during a complex geopolitical and economic period. It is marked by the continued war in Ukraine, geopolitical tensions, high inflation, fear of economic recession in the world’s largest economies and an escalation of social protests worldwide. Climate change will also feature high on the agenda amid deadly storms and floods in California and one of the worst energy crises in Europe’s history.
While Latin America is not exempt from the effects of these compounded crises, recent events, including China’s reopening and US inflation seemingly nearing its peak, begin to offer some hope.
Mixed picture
Latin American economies are heterogeneous, yet the region has yet to escape tightening global financial conditions, depreciating local currencies and high inflation, affecting essential goods beyond food and energy.
The region’s economic growth in 2022 is estimated to have been 3.6%, driven by consumption and recovering labour markets. However, due to heavy debt burdens and weak investments, among other factors, growth is forecasted to be 1.3% in 2023 and 2.4% in 2024. Gross domestic product (GDP) growth for 2022 was higher by 0.5 percentage points than projected in July, reflecting stronger-than-expected activity in the first half of 2022 on the back of favourable commodity prices and competitive exports.
Latin America representation at Davos
Representatives of 11 Latin American governments, including the Presidents of Colombia, Costa Rica and Ecuador and the Dominican Republic vice-president, will be present in Davos, together with ministers and state governors from Brazil, Mexico, Guatemala and El Salvador, Honduras, Panama and Peru. The new president of the Interamerican Development Bank and the executive director of the United Nations Economic Commission for Latin America and the Caribbean will also attend. Read More…
