Study Finds Slowdown In Exports From Latin America And Caribbean

• The value of exported goods from Latin America and the Caribbean grew at an estimated rate of 2.9% year-on-year in the first quarter of 2023, after increasing by 16.4% in 2022, according to the latest edition of the Inter-American Development Bank’s Trade Trends Estimates report.
• Although the region’s trade performance was better than the world average (-2.8%), exports from Latin America and the Caribbean (LAC) entered a slowdown phase in 2022 (28.0% growth recorded in 2021 compared to 2022’s 16.4%) after the rapid recovery that followed the COVID-19 pandemic.
• The export growth rate declined steadily throughout the year and this performance was explained by the reversal of commodity prices and less dynamic export volumes
• Notably, export performance deteriorated in all the sub-regions but was most pronounced in South America. The deterioration observed in Central and South America in 2022 deepened in the first few months of 2023. In South America, exports slowed so much that they showed a contraction.
• On the flip side, Mexican exports remained on a strongly expansionary trend for much of 2022, this began to weaken in the last quarter of the year and into the first quarter of 2023. However, Mexico remained the driving force for regional trade.
• Looking ahead, the balance of risks is moderately weighted to the downside due to the impact of tight monetary policies on global growth, uncertainty surrounding the war in Ukraine, the depletion of the expansionary effect of the reopening of the Chinese economy, and the reversal of the upward trend in commodity prices.

(Source: Inter-American Development Bank)