Latin America will be the region of lower growth at the global level this year with 2.1%, alert this April 23, the World Bank, which highlights the low investment, high indebtedness and world volatility as obstacles to its development.
In an advance of the report on Latin America and the Caribbean, the International Financial Organization expresses its concern for the commercial tensions caused by the Tariffs imposed by US President Donald Trump.
In this context, the World Bank predicts regional economic progress of 2.1% this year and 2.4% in 2026, But difference from the International Monetary Fund (IMF) does not foresee an economic contraction in Mexico, but a stagnation.
By 2025, a growth of 1.8%is projected in Brazil; in Argentina, 5.5%; in Colombia, 2.4%; in Chile, 2.1%; in Peru, 2.9%; in Ecuador, 1.9%; in Bolivia, 1.2%; in the Dominican Republic, 4%; in Guatemala 3.5%, El Salvador, 2.2%; in Costa Rica, 3.5%; in Panama, of 3.5%; in Paraguay, 3.5%; In Nicaragua, 3.4% and Uruguay, 2.3%.
In Haiti an economic contraction of 2.2%is expected.
“Higher tariffs and higher levels of commercial uncertainty in a decade prevent greater integration of the region into the United States supply chains, in addition to endangering jobs in export -related industries,” warns the World Bank.
The agreements signed by Mexico and Mercosur with the European Union “represent a step towards market diversification”, but we must “address an pending agenda of decades ago in the areas of infrastructure, education, regulation, competence and tax policy,” he advises.
The countries that will grow more, according to the BM
- Guyana: 10%
- Argentina: 5.5%
- San Vicente and the Grenadines: 4.9%
- Dominica: 4.3%
- Dominican Republic: 4%
- Granada: 3.8%
- Costa Rica: 3.5%
- Guatemala: 3.5%
- Panama: 3.5%
- Paraguay: 3.5%
- Nicaragua: 3.4%
- Surinam: 3.1%
- El Salvador 2.2%
Rethink strategies
The organism urges to rethink economic strategies before a volatile global environment. “Bold reforms are required that promote productivity and competitiveness,” said Carlos Felipe Jaramillo, vice president of the World Bank for the region. Important gaps in infrastructure, education, trade and governance persist.
“Foreign direct investment and trade remain key to accelerating growth, even in uncertain contexts,” said William Maloney, chief economist of the organism.
The projected growth by 2025 is greatly explained by the expected recovery of Argentina. However, large economies such as Brazil, Mexico, Colombia, Peru and Chile have signs of stagnation. The projection by 2026, of 2.4%, reaffirms the status of Latin America as the least dynamic region globally.
Deblation, inflation and monetary dilemmas
Regional public debt will reach 63.3% of GDP in 2024, above 59.4% in 2019. Interest payment already represents 10.9% of public spending on larger economies, limiting the margin for social investment. Inflation, although it has decreased since 2022, slows down due to international food wages and prices. Real interest rates remain high, and central banks face the dilemma of lowering them without generating capital leaks or excessive depreciation.
The low investment, combined with low productivity, slows long -term growth. Regional labor productivity represents between 20% and 60% of that of the countries of the Organization for Economic Cooperation and Development (OECD).
In addition, the adoption of technologies such as generative artificial intelligence (Genai) is limited. The report suggests active training and digital inclusion policies to take advantage of these tools in key sectors such as health and education.
The migratory return from the US presses labor markets and social systems. At the same time, the fall in international aid affects countries such as Haiti and environmental programs such as those of the Amazon. The World Bank emphasizes that China’s deceleration and the reduction of foreign assistance worsen the economic environment.
The World Bank concludes that Latin America and the Caribbean must boost structural reforms postponed by decades. Improve infrastructure, modernize taxation, strengthen education and update regulatory frameworks These are essential steps to attract investment, generate quality employment and break with economic stagnation.
Remittance flow
Trump’s policies will have an effect beyond the commercial war if it manages to fulfill their promise to carry out the greatest deportation of migrants in an irregular situation in the history of the United States.
Suddenly, the strictest immigration standards in the United States have redirect migratory flows.
“Approximately 20% of the new migrants are directed to the United States,” which continues to concentrate the most, “61% to other Latin American and the Caribbean countries and the rest to parts of Europe,” the report calculates.
Remittance flows are still high in some countries: They represent more than 15% of GDP in Nicaragua, Honduras, El Salvador, Guatemala, Haiti and Jamaica.