ECLAC brings Latin America’s economic growth to 5.9%
The Economic Commission for Latin America and the Caribbean (ECLAC) has raised Latin America’s growth projection for 2021 to 5.9%, an increase of 0.7% from its July estimate, confirming that the region’s economy is rebounding faster than expected.
However, the UN agency warned that the growth rate could decelerate to 2.9% in 2022.
Looking at the report, economic fundamentals haven’t changed much, even as the region reopens its economy after months of travel restrictions.
“The growth in 2021 is mainly attributable to the weak base of comparison – after the 6.8% contraction recorded in 2020 – as well as the positive effects linked to external demand and the increase in the price of raw materials that the region exports, as well as to increases in aggregate demand, ”ECLAC said.
The report shows that the structural problems that have limited the region’s economic growth for decades have been exacerbated by the pandemic and will limit the resumption of economic activity.
In addition, the region has seen a steady decline in investment, reaching one of its lowest levels of the past three decades in 2020 (17.9% of GDP). Likewise, labor productivity decreases significantly.
To achieve rapid and sustainable growth, the region must invest in education, renewable energy and digital technologies.
ECLAC has insisted the region must end tax evasion, saying it represents around $ 325 billion (or 6.1% of regional GDP).