Peru’s GDP | ECLAC lowers growth forecast for Peruvian economy for 2023 | BCR | FEM | Inflation | Latin America | Economy

The Economy Latin America and the Caribbean will grow by 1.7% this year and 1.5% in 2024, it said on Tuesday. ECLACDespite a modest upward correction for the year, amid a prolonged dynamic of low growth and macroeconomic issues in the region.

The United Nations agency expects all sub-regions to show less activity compared to 2022 and the figures for the first quarter not only confirmed the regional slowdown on an annual basis, but also showed stagnation in gross domestic product (GDP) over the past four years. in quarters.

In 2022, the region grew by 3.8% according to preliminary figures. In April, ECLAC predicted that Latin America and the Caribbean would grow by 1.2% this year.

According to the report, the economy Brazil It will grow by 2.5% this year and 1.4% next; that Argentina 3.0% and 1.6% decrease respectively Mexico It will advance 2.9% and 1.8%. He for his part Peruvian GDP will grow by 1.3% in 2023 and 2.5% during the next Colombian It will rise between 1.2% and 1.9%. In April, ECLAC forecast 2.0% growth for Peru this year.

“Projections for 2024 indicate that low activity in the region will continue. The international environment is expected to remain unfavorable as global GDP and trade growth are well below historical averages.”, said the Santiago-based organization.

Domestically, added the Annual Economic Review of Latin America and the Caribbean, there is limited space for macroeconomic policy, both fiscal and monetary.

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“Public debt remains at a high level, which, together with an increase in foreign and domestic interest rates and an expected drop in tax revenues as a result of low growth, makes it possible to expect limited fiscal space throughout the region.The report said.

Last July, Chile became the first major economy in the region to begin an expected cycle of deflation, after central banks raised rates sharply to tackle post-pandemic recovery and inflation left over from the war in Ukraine.

The document also highlights that while inflation dynamics have slowed, they are above levels seen before the pandemic and central banks’ target ranges.This suggests that interest rates will remain relatively high throughout the year”.

On the other hand, lower growth in activity this year and next year will cause a slowdown in employment growth, which is estimated at 1.9% in 2023 and 1.1% in 2024, worsening the quality of jobs. Its effect on jobs and wages and poverty levels.

Source: Reuters

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