The economy of Latin America and the Caribbean will expand by 2.1% this year, amid the trend of low economic growth observed in recent years, reported Thursday the ECLAC. On the contrary, Argentina would decline more than 3%.
The Economic Commission for Latin America and the Caribbean added that Brazil’s Gross Domestic Product (GDP) will grow by 2.3% and Mexico’s by 2.5%, while activity in Argentina will decline by 3.1% in 2024 In December, the organization had estimated an expansion of the regional economy of 1.9%.
In the case of Argentina, the fall in activity is marked by the strong adjustment of the Economy applied by the government of Javier Milei.
Industrial production registered a year-on-year drop of 21.2% in March and the index that measures construction activity sank 42.2% in the same period, reported the National Institute of Statistics (Indec). Added to this is the marked drop in consumption. For example, sales in stores decreased 16% on average.
The monthly record of both indicators also showed declines compared to the previous month: 6.3% in industry and 14.2% in construction, the report detailed.
In the case of the industry, the cumulative figure for the first quarter of 2024 shows a drop of 14.8% compared to the same period of the previous year.
This is the largest setback in industrial production since April 2020, when the plants were semi-paralyzed in the midst of the quarantine due to the covid-19 pandemic.
All industrial items showed falls in March compared to the same month in 2023. The biggest declines in that period were the production of furniture (-40.4%), machinery (-32.6%), automobiles (-24.7% ), textiles (-22.9%) and food (-14.4%).
In the case of construction, one of the areas with the greatest impact on the workforce, asphalt shipments fell 69.2% year-on-year in March, iron shipments -54.3% and cement shipments -43.1 %.
This item suffered the strong impact of the stoppage of all public works in the country since last December, as provided by the government within the framework of its adjustment policies.
Private construction activity accompanied the fall.
53.3% of companies that carry out mainly private works predict that the level of activity in the sector will not change during the next three months, while 39.0% estimate that it will decrease due to the fall in economic activity and the instability of prices, Indec reported.
Regional context
“The region is facing a complex international scenario, characterized by growth in economic activity and global trade below their historical averages, along with interest rates that remain high in developed countries, resulting in higher financing costs for emerging countries,” ECLAC noted.
“The low growth expected in 2024 is not only a temporary problem, but reflects the fall in the trend growth rate of regional GDP,” he added.
Colombia’s GDP would expand by 1.3% this year, while Chile’s would expand by 2.3% and Peru’s by 2.5%. Venezuela would grow 4%.
Among the risk factors, ECLAC listed growing geopolitical tensions and the threat that the rise in basic products could delay a cut in interest rates by central banks, affecting global economic expansion.
The organization said that the region needs to invest in critical areas to increase productivity, infrastructure, telecommunications, digitalization, research and development, significant improvements in health programs, and adaptation to educational systems.
Source: Ambito
