(CMC) – The United Nations’ Economic Commission for Latin America and the Caribbean (ECLAC) says the region will record a decline in economic growth this year, down from the 6.2 per cent on average last year.
ECLAC is predicting that the region will record growth of 2.1 per cent this year and according to its annual report titled “Preliminary Overview of the Economies of Latin America and the Caribbean 2021”, this slowdown takes place “in a context of significant asymmetries between developed, emerging and developing countries, with regard to the capacity to implement fiscal, social, monetary, and health and vaccination policies for a sustainable recovery from the crisis unleashed by the COVID-19 pandemic.”
The report indicates that the region is facing “a very complex 2022: uncertainty regarding the pandemic’s ongoing evolution, a sharp deceleration in growth, continued low investment and productivity and a slow recovery in employment, the persistence of the social effects prompted by the crisis, reduced fiscal space, increased inflationary pressures and financial imbalances.
ECLAC’s Executive Secretary Alicia Bárcena said the expected slowdown in the region in 2022, combined with the problems of low investment and productivity, poverty and inequality, calls for growth and employment creation to be central elements of public policy making while at the same time addressing inflationary pressures.
According to ECLAC, the 2.1 per cent average growth foreseen for this year “reflects great heterogeneity” among countries and subregions.
The report notes the Caribbean will record growth of 6.1 per cent, excluding Guyana noting that in 2021, the region experienced “higher-than-expected growth”, averaging 6.2 per cent due to the low baseline established in 2020, to greater mobility and to a favourable external context.”
According to the Preliminary Overview 2021, estimates point to advanced economies growing by 4.2 per cent in 2022, “being the only ones to resume the growth trajectory foreseen before the pandemic over the course of this year.”
Emerging economies, meanwhile, are seen growing 5.1 per cent in 2022, but the report states they will only resume the growth trajectory forecast before the pandemic in 2025.
In 2021, the report noted 11 countries in Latin America and the Caribbean managed to regain the gross domestic product (GDP) levels seen prior to the crisis.
It said this year, another three countries will join them, accounting for a total of 14 countries of the 33 that make up the region.
“It is of central importance that the combination of monetary and fiscal policies prioritises growth stimulation, as well as inflation containment. This entails the need for coordinated fiscal and monetary policies and the use of all available instruments to adequately prioritise the challenges of growth with monetary-financial stability,” the report stated.
In terms of the labour market, it reports that employment recovered at a slower pace than economic activity last year. ECLAC said 30 per cent of the jobs lost in 2020 had not been recuperated by 2021.
Furthermore, the inequality between men and women was “accentuated, reflecting the larger care burden on women and less dynamism in the sectors in which female employment is concentrated, such as services.”
In 2022, ECLAC projects an 11.5 per cent unemployment rate for women – slightly below the 11.8 per cent recorded in 2021, “but still well above the 9.5 per cent existing before the pandemic in 2019.”
Unemployment among men is forecast at eight per cent this year, “nearly identical to that of 2021 (8.1 per cent) and still far above the 6.8 per cent seen in 2019”.