The organization improved its projections by 60 basis points, after overcoming the bulk of the consequences of the drought.
The Economic Commission for Latin America (ECLAC) presented his Preliminary Balance of the Economies of Latin America and the Caribbean 2023, in which he also updated the countries’ growth projections for next year. In that sense, Uruguay had a significant improvement, and if growth of 2.6% was expected, the forecast was raised to 3.2%.
Although 2023 will close with a meager growth of 1% for Uruguay —a projection that was unchanged from the last report, even though the growth outlook for Latin America improved to 2.2%—; growth forecasts Gross Domestic Product (GDP) of the country for 2024 they rose from 2.6% in September to 3.2% In the last report of the year of the ECLAC.
With these figures, the country will be the third in South America with greater progress in its economy—only behind Venezuela (4%) and Paraguay (3.8%)—during a year that will also be marked by the maintenance of low growth dynamics.
The Uruguayan 2023 was strongly conditioned by the historic drought that the country suffered and its consequences, both in terms of exports —mainly agricultural ones— as in increase in spendingwhether intended for support measures for the most affected sectors or for energy maintenance of the population in the midst of the water crisis.
Now that these inconveniences have almost been completely overcome, Uruguay would prepare for a year of greater growthwithin a regional framework that will once again demonstrate limited positive results.
What are the prospects for the region?
According to the report of the ECLAC, Latin America and the Caribbean will maintain the path of low growth, “what will mean a slowdown in job creation and the persistence of informality and gender gaps, among other effects.”
This will happen even despite a slight improvement in the prospects for 2024: regarding growth in Latin America, the international organization rose from 1.5% to 1.8% of regional GDP; while for South America, it went from 1.3% to 1.4%. The slowdown in regional growth Regarding 2022, it will continue to be the trend next year.
These projections reflect, on the one hand, the low dynamism of economic growth and global trade, which results in a limited boost from the world economy. The high interest rates of the main powers has to do with maintaining this situation despite the fact that inflation rates were reduced in general terms – a scenario that has its correlation at the regional level.
On the other hand, the low growth also responds to the limited internal fiscal policy space and monetary crisis faced by the countries of the region. In this sense, public debt levels remain high; This, added to the increase in the cost of financing, restricts fiscal space.
Source: Ambito
