Latin America and Caribbean Economies Expected to Grow 2.4% In 2025, UN Says

Economies in Latin America and the Caribbean are expected to grow by 2.4% in 2025, driven by domestic consumption but tempered by a risk of worsening global geopolitical and trade tensions, the United Nations said on Wednesday, December 18, 2024.
The UN's Economic Commission for Latin America and the Caribbean (ECLAC) raised its projection for growth in the region from 2.3% in August but said its estimate is for the region to maintain a "low growth trajectory."
Private consumption will be the main driver for growth in the region, similar to 2024, but "with a more moderate expansion." ECLAC also revised its regional growth forecast for this year to 2.2%, up from 1.8% in August. Employment is expected to continue to grow slightly in 2025, despite a weak labour force participation rate compared to pre-pandemic levels and persistent gender inequality.
That said, the main risks to the region's economies include intensifying geopolitical and trade tensions that could affect the price of raw materials, as well as complicate shipping routes and transport logistics.
That said, countries in Latin America and the Caribbean are on a downward trend in inflation, which, combined with monetary easing in the United States, has allowed rate-setters to reduce interest rates in a "heterogeneous and cautious" manner, and should keep private demand robust.
That said, the ECLAC stressed that the outlook for investment in the coming years remains discouraging amid weak public spending. "Gross fixed capital formation is expected to continue to contract, which calls into question its role in sustaining medium- and long-term growth in the region's economies," the report said.

(Source: Reuters)