Despite a weakened global economic growth, outlook projected by the United Nations World Economic Situation and Prospects (WESP) mid-2019 report, which was released yesterday in New York, suggests that growth in Latin America and the Caribbean is expected to slowly increase. However, risks remain tilted to the downside due to external and domestic factors.
The report reveals that the global economy is experiencing a broad-based growth slowdown amid unresolved trade tensions, high international policy uncertainty, and softening business confidence.
The projection casts a shadow over efforts to implement the 2030 Agenda for Sustainable Development, which has set universal goals for eliminating poverty, and promoting prosperity and social well-being while protecting the environment. Weaker economic growth puts at risk essential investments in areas such as education, health, climate change adaptation, and sustainable infrastructure.
According to the report, the growth outlook in all major developed economies and most developing regions has weakened due to a confluence of both domestic and external factors. Following an expansion of 3.0 per cent in 2018, world gross product growth is now projected to moderate to 2.7 per cent in 2019 and 2.9 per cent in 2020, reflecting a downward revision from the forecasts released in January.
In Latin America and the Caribbean, GDP is projected to expand by only 1.1 per cent in 2019 and 2.0 per cent in 2020, following growth of 0.9 per cent in 2018. The estimated growth of 2.0 per cent in 2020 would be attributable to a gradual improvement of Argentina’s and Brazil’s economic conditions.
If slowdowns in the economies of the United States, China and the EU — the region’s main trading partners — are worse than expected and if there is renewal of financial volatility, additional weakening of the recovery could take place.
“In several of the region’s economies, ongoing political uncertainty clouds the prospects for investment and growth,” reads the report. “In view of significant downside risks, limited inflationary pressures and constrained fiscal space, most central banks are likely to maintain accommodative monetary policies to support growth.”
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