Economic uncertainty, geopolitical tensions stall growth in Latin America and Caribbean region, UN says

World Bank/Gerardo Pesantez Construction to expand the Panama Canal. (File)

This article is brought to you in association with the United Nations.

Citing “an external context of greater uncertainty and growing complexity”, the head of the UN Economic Commission for Latin America and the Caribbean (ECLAC), said on Wednesday that the region’s economic growth is expected to decline.

Launching the Economic Survey of Latin America and the Caribbean 2019 at a press conference in Santiago, Chile, ECLAC Executive Secretary Alicia Bárcena pointed to “less momentum from world economic activity and global trade; greater volatility and financial fragility; questioning of the multilateral system; and an increase in geopolitical tensions” as the reasons driving the downward-looking forecast.

According to the report, an unfavorable international scenario will spark a drop in the region’s growth to 0.5 per cent this year – lower than the 0.9 per cent registered in 2018.

Likewise, low internal growth is attributed to a lack of momentum in investments and exports as well as a fall in public spending and private consumption.

Compared to previous years, the 2019 slowdown will affect 21 of the 33 countries in the region.

On average, South America is expected to grow by 0.2 per cent, Central America 2.9 per cent and the Caribbean 2.1 per cent.

The 2019 Survey cited restricted fiscal space that is fueled by insufficient income levels to cover spending that translates into deficits and debt increases in recent years.

Moreover, growing foreign exchange volatility and greater depreciation will limit central banks in the region to deepen policies to stimulate aggregate demand.

Additionally, structural conditions accentuate external vulnerability and do not help to spur growth – as the export structure focused mainly on primary goods and falling trend in productivity.

According to ECLAC, policy space needs to be expanded to tackle the slowdown and contribute to economic growth, with measures in the fiscal and monetary areas, as well as in investment and productivity.

In the fiscal arena, the survey cites the need to reduce tax evasion and illicit financial flows; promote taxes related to the digital economy, environment and public health; and realign tax expenditures toward productive investment.

Structural changes

The second part of the Economic Survey 2019 analyzes the structural changes in international finance subsequent to the 2007-2008 global crisis – from a regional perspective.

The report suggests that the bond market has gained relative importance with respect to the banking system and that levels of concentration, interconnectivity and pro-cyclicality have intensified. In addition, global debt registers record low levels of 320 per cent of gross domestic product in a context of growth.

To tackle these challenges, the report recommends expanding and standardizing of vulnerability indicators.

It also advocates advancing toward broader and more homogeneous macro-prudential regulation to encompass not only the formal banking sector but also all financial agents, including the so-called “shadow banking system”, in which groups of financial intermediaries facilitate in creating credit across the global financial system.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

UN agencies ramp up Somalia measles and polio campaign

Here’s what you need to know about Bangladesh’s rocketing economy

European car industry: The Germans want it all

It’s time to strengthen global digital cooperation

G20 LIVE: “United States and Turkey stand in solidarity with France and its people in handing the perpetrators of this crime and bringing them to justice”, US President Barack Obama underlines from G20 in Antalya Turkey

The European Union and the United States sign an agreement on imports of hormone-free beef

Costa Rica is one of the world’s happiest countries. Here’s what it does differently

From DIY editing to matchmaking by DNA: how human genomics is changing society

MEPs vote to limit negative impact of no-deal Brexit on citizens

A Wholesome Health Care for Transgenders: Sex Reassignment Surgery

What living abroad does to your self-awareness

More international support needed to curb deadly measles outbreak in DR Congo

Yes, together we can make a change! YO!Fest and EYE 2016

International Women’s Day 2019: more equality, but change is too slow

These are the world’s best countries to retire in, as of 2019

€200 million to promote European agri-food products in and outside the EU

E-energy declaration: will energy digitalization be beneficial to the climate?

Thursday’s Daily Brief: Safeguarding civilians, strengthening Ebola response in DR Congo, marking Fistula Day, updates on CAR and Syria

The Free World Experience Report – LGBTQI+ health on the spot

3 leaders on creating a pipeline for female talent in business

MEPs and European Youth Forum call on EU to Invest in Youth

Wages are flatlining around the world – is automation to blame?

These 4 trends are shaping the future of your job

Finland must focus on integrating migrant women and their children to boost their contribution to the economy and society

European Junior Enterprise Network – Ready to take the Step Into the Future?

An alternative to the future of antimicrobial therapy

Rohingya cannot become ‘forgotten victims,’ says UN chief urging world to step up support

More progress needed on reducing and redesigning agricultural support policies

Dare to be vulnerable, and three other lessons in leadership

European Energy Union: Integration of markets and need for in-house energy production

In Afghanistan, attacks against schools have tripled in one year

Why climate change matters for future health professionals

5 lessons for social entrepreneurs on how to change the system

Japan’s population is shrinking by a quarter of a million people every year

Deep fakes could threaten democracy. What are they and what can be done?

How do we make artificial intelligence more humane?

EU budget: Regional Development and Cohesion Policy beyond 2020

EU paves the way for a stronger, more ambitious partnership with Africa

Banks worth $47 trillion adopt new UN-backed climate, sustainability principles

This is Amsterdam’s ambitious plan to turn its transport electric

This credit card has a carbon-emission spending limit

United States: UN chief ‘deeply saddened’ by deadly California wildfires

Elections in Britain may reserve a surprise for May’s Tories

These 5 foods are under threat from climate change

European Elections: “Web giants” are urging users to vote

Boardroom warriors: how CEOs are becoming champions of change

New Report Offers Global Outlook on Efforts to Beat Plastic Pollution

Light at the end of the Eurozone tunnel

Fertilisers/cadmium: Parliament and Council negotiators reach provisional deal

How we can work together in the fight against NCDs

Two peacekeepers killed in an attack against UN convoy in Mali

5 rules for making employers and employees trust each other again

MWC 2016 LIVE: Under Armour learns from “robust community of data”

India’s economy is growing fast, but its poorest areas lag behind. Here’s why this could be about to change

This is what has led to the George Floyd protests in the United States

The US bugged Europe: Is this news?

Sochi not far away from Ukraine

Presentation of Juncker’s Investment Plan: Can 315 billion euros save the EU?

Wednesday’s Daily Brief: migration tragedy in the Rio Grande, drugs report, Torture Victims Day

Statement by Frans Timmermans, Executive Vice-President for the European Green Deal, on the announcement to postpone the COP26

More Stings?


Speak your Mind Here

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s