He world Bank estimated this Tuesday, January 9, that the Argentina will grow 2.7% in 2024, thus turning the 2.5% drop experienced in the previous periodwhile predicting that By 2025 the local economy would increase by 3.2%.
In its latest report, the entity stated that “The region’s economic outlook suggests a gradual recovery, with projected growth of 2.3% in 2024 and 2.5% in 2025,” compared to what 2023 turned out to be.
In 2023 “The Latin American and Caribbean region experienced a significant economic slowdown, with growth of only 2.2%”recalled the multilateral organization.
This slowdown, continued, “occurred against the backdrop of high inflation, tight monetary conditions, weak global trade and adverse weather events.”
Despite these difficulties, the World Bank stated that the growth of Brazil and Mexico exceeded previous forecasts.
“Brazil’s positive performance was due to the fact that agricultural production was higher than expected, private consumption was firm and exports increased in the first three quarters of the year”and similarly, Mexico recorded higher-than-expected growth in both private consumption and investment.
Region: gradual recovery of the economy by 2024
For this year and next, “The region’s economic outlook suggests a gradual recovery, with projected growth of 2.3% in 2024 and 2.5% in 2025. While the lingering effects of previous monetary tightening will continue to weigh on near-term growth , its impact is expected to be attenuated,” Indian.
Thus, as inflation decreases, it is expected that central banks will lower interest rates, “which will reduce obstacles to increased investment”the entity’s economists predicted.
The specific projections for the rest of the countries are different: in the case of Brazil’s growth is expected to slow to 1.5% in 2024, but in 2025 it will recover and stand at 2.2%, hand in hand with lower inflation and interest rates.
For its part, the growth of Mexico will ease to 2.6% in 2024 and 2.1% in 2025, as a consequence of the fall in inflation and the decrease in external demand. On the other hand, the Argentine economy is expected to recover and expand by 2.7% in 2024 and 3.2% in 2025, after the drought of 2023.
According to forecasts, the trajectory of Colombia’s growth will improve from 1.2% in 2023 to 1.8% in 2024 and 3% in 2025; while in Chile growth will be 1.8% in 2024 and will then accelerate to 2.3% in 2025.
Likewise, it is projected that Peru will recover from the contraction of 2023, with 2.5% growth in 2024 and 2.3% in 2025, supported by increased mining production.
As for potential risks, “The modest planned regional expansion is exposed to multiple risks. Escalating geopolitical tensions, especially in the Middle East, could disrupt energy markets and cause oil prices to rise,” they warned.
Extreme weather events, meanwhile, which are intensified by climate change, pose additional threats, particularly to climate-sensitive sectors such as agriculture, energy and fisheries.
Likewise, external factors and global trends also contribute to the risk landscape, they indicated.
“Persistent core inflation in advanced economies could be accompanied by high interest rates for a prolonged period, which would limit the region’s monetary and fiscal policies,” they analyzed.
Finally, he noted that “a more abrupt than expected slowdown in the Chinese economy could have important secondary effects on external demand, which would affect the region’s commodity exports.”
Source: Ambito
