Latin America Trapped in Low-Growth Cycle

Latin America, the world's most unequal region, grew by 6.9% in 2021, as a rebound after the pandemic collapse, but slowed to 3.7% in 2022 and closed 2023 with 2.3% growth, the same figure as in 2024 and the same as ECLAC projects for 2026. With these indicators, 'a sequence of four years with rates close to 2.3% is completed, which confirms the fact that the region continues to be in a low-growth trap,' said ECLAC in its 'Preliminary Overview of the Economies of Latin America and the Caribbean 2025' report, presented this Tuesday at its headquarters in Santiago. Venezuela (6.5%), Paraguay (5.5%), Argentina (4.3%), and Costa Rica (4%) lead Latin American growth, according to the international body's projections. For 2026, the UN-dependent body, as in August of last year, projects a 2.3% expansion of the GDP of Latin America and the Caribbean, maintaining a 'low-growth dynamic' next year in an international context that 'remains uncertain.' Lagging, but still with positive figures, are the Dominican Republic (2.9%), Colombia (2.6%), Chile (2.5%), Brazil (2.5%), and Uruguay (2.2%). On average, the Caribbean islands project 1.9% growth for 2025 without Guyana, which, amid its 'oil boom,' marks 15.2%, far from 43.6% in 2024. The Economic Commission for Latin America and the Caribbean (ECLAC) maintained its 2.4% projection for the region's GDP growth for 2025 this Tuesday, slightly higher than the 2.3% observed last year. The economies of Cuba (-1.5%) and Haiti (-2.3) are the only ones expected to contract in 2025, according to ECLAC. Following them are Guatemala (3.9%), Honduras (3.8%), Panama (3.8%), El Salvador (3.5%), Nicaragua (3.5%), Peru (3.2%), and Ecuador (3.2%) in the middle of the table. As a result of the 'low-growth trap,' 'today's per capita GDP in the region is slightly higher than it was 10 years ago, the poverty rate has slowed, there is a low rate of job creation, and the trend towards reducing informality has also stopped,' said ECLAC's Executive Secretary, Manuel Salazar-Xirinachs. 'More ambitious productive development policies are needed, especially now under the new conditions of geo-economic rivalry, combined with macroeconomic policies that mobilize more resources for growth, innovation, economic diversification, productive transformation, and the creation of quality jobs,' the high-ranking official stressed.