ECLAC chief sees sharp slowdown in LatAm growth in 2022

By Pedro Pablo Cortes

Mexico City, Jan 13 (EFE).- Latin America’s strong 6.2 percent growth rate last year will not be maintained in 2022, the outgoing executive secretary of the United Nations Economic Commission for Latin America and the Caribbean said Thursday in an interview with Efe.

Although regional gross domestic product rose at a healthy clip in 2021 thanks in large part to high commodity prices and a recovery in international trade, Alicia Barcena said that level of economic expansion is unsustainable.

“The problem we see is that it’s not growth that can be sustained. And that’s what concerns us the most. And that’s why in 2022 we see a very significant slowdown” coming, she said in a video call.

She made her remarks after presenting ECLACs latest annual report – “Preliminary Balance of the Economies of Latin America and the Caribbean 2021” – in Mexico City.

In that report, ECLAC raised its expectations for 2021 growth to 6.2 percent, up from 5.9 percent in August, but it lowered its forecast for 2022 growth from 2.9 percent to 2.1 percent.

Barcena said external factors would weigh heavily on the region and noted in particular expectations for slower growth in China and the United States, the region’s main trade partners.

But she also pointed to regional problems such as inflation, which rose 7.2 percent in 2021 (not taking into account Argentina, Venezuela, Haiti and Suriname) and Latin America’s longstanding lags in productivity, investment and domestic value-added in exports.

Latin America has been the region hardest hit from an economic and health standpoint by the pandemic, with nearly 50 million confirmed coronavirus cases and more than 1.5 million deaths attributed to Covid-19.

Barcena said the pandemic laid bare the region’s socioeconomic disparities, noting that only 61.5 percent of the population across 19 Latin American countries has received the full initial two-dose vaccination series.

By comparison, that figure for the European Union stands at nearly 70 percent.

Referring to recent political changes in countries like Peru, Honduras and Chile, where left-wing candidates won presidential elections in 2021, the ECLAC chief said they were a reaction to deep-seated disparities and inequality.

“We’re seeing that they’re governments that are bringing a strategy to the table for a greater redistribution of productive assets and income, and I think ultimately a new development model is being imposed,” Barcena said.

“Inequality is something that society is wary of,” so there’s an environment for “building new political pacts” to “better redistribute wealth.”

“There’s a growing urgency in the region to move toward greater equality in every sense, or toward growth that at least has double labor and social inclusion,” she added.

The executive secretary also expressed support for Mexican President Andres Manuel Lopez Obrador’s idea for the countries of Latin America and the Caribbean to come together in a European Union-style bloc.

“We have an opportunity that we can’t afford to squander. I don’t know if we’re ready for the region to be a single bloc. There are many issues to resolve on the way, but I think there are sectors in which we can make progress,” Barcena said.

The 69-year-old Mexican biologist will step down as ECLAC’s executive secretary on March 31 after occupying that position since July 1, 2008.

That organization’s focus on inequality in its analysis of the region has been Barcena’s main legacy.

“Another contribution I’m very proud about is having put the organization to work also on the issue of climate change and how we need to change our model of development to a model that’s more egalitarian and sustainable,” she added. EFE