The ECLAC report predicted that Panama would surpass its Central American neighbors, the Caribbean, and even Mexico. The study also raises that Latin America might face many upcoming problems, like lower trade growth.
The latest ECLAC report classifies Panama as the country with the highest growth in Central America in late 2022. The study also raises various upcoming problems that Latin American nations might face.
After an inflation slowdown, the ECLAC stressed that Panama would be the leading economy in the region. The commission said the country would also surpass the nation in the Caribbean and even Mexico.
The average growth rate in the rest of Latin America might reach 2.5%, but Panama would have an estimated growth rate of 7.0%. However, that figure for the Central American country decreased slightly after the ECLAC forecast it would be 7.3% in early 2022.
The ECLAC included Panama among the countries not recovering their gross domestic product level before the COVID-19 pandemic.
Those results appear in the new edition of the Economic Survey of Latin America and the Caribbean 2022: trends and challenges of investing for a sustainable and inclusive recovery.
The ECLAC Predicts Less Growth and More Inflation
According to the ECLAC report, several crises have led to the low growth and inflationary acceleration global scenario. Besides, lower trade growth, the US dollar appreciation, and tighter global financial conditions will affect Central America negatively.
Mario Cimoli, interim executive secretary of the ECLAC, considers coordination of macroeconomic policies would stimulate growth and reduce inflation effects.
Cimoli said those strategies would support growth acceleration, investment, and the reduction of poverty and inequality. He explained that they would do that to face inflationary dynamics amid numerous objectives and growing restrictions.
The ECLC Predicts a Complex Macroeconomic Outlook for Latin America
The ECLAC report highlights that Latin America and the Caribbean might face a complex economic outlook. It explains that the lower economic growth adds to significant inflationary pressures, less creation of jobs, falls in investment, and growing social demands.
That has caused significant challenges for the macroeconomic policy aimed to promote economic reactivation to control inflation and make public finances sustainable.
The report also mentions that the Russia-Ukraine conflict intensified the upward trend in the prices of products, causing them to reach all-time levels.
In 2022, South America might grow by 2.6%, Central America and Mexico by 2.5%, and the Caribbean by 4.7%. Panama would be the only exception, as the commission estimates a growth of 7%.
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By Alexander Salazar
