He world Bank presented its financial report to Latin America and the Caribbean with the expectations, opportunities and challenges that the international organization foresees for the region in the coming years; and projected a growth of 1.8% of the Gross Domestic Product (GDP) in Uruguay for this year.
The Latin American situation still has a lot to do to recover the economic levels prior to the coronavirus pandemic. Covid-19. This is stated in the latest World Bank report, “The potential of integration – opportunities in a changing global economy”which was presented this morning by the chief economist for Latin America and the Caribbean, William Maloney, at a conference he attended scope.com.
The outlook is similar for the entire region, but in Uruguay —as well as in Argentina, which, in turn, has other peculiarities— there is an element that has had a strong impact in recent months when making forecasts: drought.
According to the World Bank, the expected growth for the country this year will be 1.8% of GDP. This estimate is lower than that of a few months ago, but the reduction is in line with the regional scenario. In Uruguay, in addition —as Maloney pointed out— it also affects the economic impact of the water deficit, especially in the agro-export production.
For the chief economist, “the issue of drought is increasingly important and highlights the focus that the World Bank is placing on the issue of climate change and the need to mitigate the increase in temperatures, as well as the issue of making countries more resilient to extreme weather events.
As for the coming years, growth expectations are of the 2.8% and 2.4% for 2024 and 2025respectively.
Uruguay is better off in the regional scenario but it does not seem to be an exception
Latin America and the Caribbean performed poorly compared to the world and is the region that has grown the least since 2019, with a slow post-pandemic recovery, according to the World Bank report accessed by Ámbito.com. In this context, and despite it, South America is the subregion that has most recovered “normality”; and Uruguay is one of the countries with the best performance, with inflation, employment and poverty figures improving after a year of record exports.
In this sense, there are some aspects that affect the country and the nations of the region in a very similar way: above all, the need to increase participation in international tradebut no longer from the perspective of being “the barn of the world”, but with added value.
For World Bank analysts, opportunities lie in the trend towards nearshoring and the need to diversify the sources of products and services in a complex geopolitical context; and in the comparative green advantage that the region has, with an important grid of electricity generated by renewable resources.
This last point is where Uruguay has the greatest opportunities, with the production of green hydrogen at the forefront. In fact, the government has just signed a cooperation agreement on energy transition with Germany, with possibilities of exporting hydrogen to Europe. For the international organization, this will be the bastion to recover the economic integration of the region, and the country has great opportunities.
Likewise, the exportation of services it will play an important role in recovering Latin America’s weight in the global economy. In this regard, Uruguay is working hard to become an export hub of innovation and information technologies (IT); In addition to promoting trade in Free trade zone to increase the flow of investment to the country.
Source: Ambito
