Taken from EFE
Santiago, Chile
The Economic Commission for Latin America and the Caribbean (ECLAC) yesterday cut its regional growth forecast for this year by four tenths of a percent, reducing its estimate to 2% due to the trade war.
"The region is facing a very complex and highly uncertain international scenario," the United Nations agency, based in Santiago, Chile, warned in a statement. Last December, it estimated regional growth of 2.4%.
This is the first update made by ECLAC since US President Donald Trump started the trade war and since he announced on April 2 the so-called "reciprocal tariffs" of 10% on most of his trading partners, including Latin America.
ECLAC's estimate coincides with the one published last week, on Thursday, April 24, by the World Bank, an institution that stated that in a global environment marked by uncertainty and low economic dynamism, the Dominican Republic stands out as one of the few positive exceptions in Latin America and the Caribbean.
According to the most recent World Bank report, the country will register a gross domestic product (GDP) growth of 4% in 2025, placing it only behind Argentina, which will lead the region with a projection of 5.5%.
By subregions, the largest cuts expected by ECLAC are for the Caribbean (from 2.6% estimated in December to 1.8%) and for Central America and Mexico (from 1.7% to 1%), while the revision for South America is only one tenth down (from 2.6% to 2.5%).
Of the 33 countries in the region, only Argentina, Peru and Ecuador registered upward revisions, while the countries with the largest cuts in their growth forecasts are Venezuela, Mexico and Haiti.
Argentina and the Dominican Republic lead the growth
- Argentina (5%)
- Dominican Republic (4.5%)
- Costa Rica (3.6%) and Paraguay (3.6%)
In the middle of the table are Guatemala (3.3%), Honduras (3.2%), Nicaragua (3.1%), Panama (3.1%), Peru (3.1%), Uruguay (2.6%), Colombia (2.5%), El Salvador (2.5%), Chile (2.2%) and Brazil (2%).
At the bottom of the list, but still with positive figures, are Bolivia (1.8%), the Caribbean islands excluding Guyana (1.8%), Ecuador (1.5%) and Mexico (0.3%), while Cuba (-0.4%), Venezuela (-1.5%) and Haiti (-2%) are the only ones that will decrease this year, according to the United Nations agency.
"The tariff announcements made by the United States not only have direct effects on the exports of the countries of the region to that economy, but also indirect effects through greater volatility in international financial markets," the organization explained.
Latin America and the challenge of overcoming its low growth
According to ECLAC, "the resulting geoeconomic confrontation has increased the risk of serious disruptions to global production chains and international trade flows" and "has led to a downward revision of growth prospects globally and, in particular, for the region's main trading partners: the US and China.".
Latin America, the most unequal region in the world, closed 2023 and 2024 with a growth of 2.3%.
According to the organization, the trade war "deepens the great challenge of reversing the path of low economic growth that the region has shown in the last decade" and demonstrates that "boosting growth requires a combination of macroeconomic and productive development policies that are more proactive than those the region has had so far.".
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Photo: El InmobiliarioArchive.
