Latin America will grow 5.9% this year, a figure that reflects the statistical rebound in relation to the contraction of 6.8% last year, according to estimates by the Economic Commission for Latin America and the Caribbean (ECLAC).
According to its Economic Study for 2021, the commission projects that growth will moderate in 2022, reaching a 2.9% rise in gross domestic product (GDP).
The biggest limitation, said Alicia Bárcena, executive secretary, is the lack of investment by governments.
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"What is happening in our region is dramatic," Bárcena said at a virtual press conference on Tuesday.
“We have to say, our region had a much slower growth rate in more than a century.
And beyond 2021, the great challenge will be how we reverse this dynamic, "he added.
The average growth rate between 2013 and 2019 was 0.3% - the lowest since the First World War.
"Our region is not able to overcome its structural problems of low investment, productivity, informality, poverty and inequality that were already limiting before the pandemic and that worsened with the pandemic," said Bárcena.
“What is it that worries us the most?
Investment and productivity, which are a structural problem in the region and as long as we cannot solve them, we will not achieve sustainability, growth and a recovery beyond the statistical rebound ”.
Governments in Latin America and the Caribbean invest, on average, 17.6% of GDP in public investment, the lowest ratio compared to the rest of the world.
In comparison, developed economies invest 22% and developing economies invest 32.9%.
"Our region must, at least, advance to the average," said Bárcena.
ECLAC estimates that the world economy will grow about 6% this year, and in 2022, 4.5%. The projected growth for Latin America this year and for 2022 is lower than that projected in developed economies. In addition, low productivity and high informality, unemployment, inequality and poverty worsened with the pandemic, which is why ECLAC advocates that governments continue to provide the basic income that was implemented in emergency, with amounts and coverage similar to those seen in 2020 , during this year.
“There are important asymmetries between developed countries and middle-income nations -among which are most Latin American and Caribbean countries- both in the dynamics of vaccination and in the ability to implement policies for recovery. economic ”, assured Bárcena. “To maintain expansive fiscal and monetary policies, the countries of the region need to complement domestic resources with greater access to international liquidity and with multilateral mechanisms that facilitate debt management, if necessary. Multilateral initiatives are needed to face uncertainties about vaccination and developing countries' access to financing under adequate conditions ”, he added.
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