SANTIAGO — The Economic Commission for Latin America and the Caribbean (ECLAC) has adjusted upwards its economic growth forecast for the region this year to 5.9 percent, as expectations improve for a global recovery following the COVID-19 pandemic.
The United Nations body had projected an expansion in the region’s gross domestic product (GDP) of 5.2 percent at the start of July, but said the panorama was looking brighter amid the gradual reopening of economies and relaxation of sanitary measures around the region.
ECLAC warned however that a better performance this year would still not see countries in the region returning to pre-pandemic levels of economic activity and that longer term growth remained uncertain, given the uneven progress of the COVID-19 vaccination roll-out in Latin America.
It also said some economies had structural problems that had hindered sound growth even before the pandemic.
Private consumption will be the biggest driver of growth in 2021 and 2022, representing more than half of the increase in economic activity, ECLAC said.
Public consumption would play a lesser role, it said, since the extraordinary measures implemented by governments to combat the pandemic mostly consisted of direct cash transfers to households “that for accounting purposes are reflected in an increase in private consumption.”
ECLAC adjusted its 2021 projection for Brazil’s economy upwards to 5.2 percent from 4.5 percent previously and that of Mexico to 6.2 percent from the previous projection of 5.8 percent.
The agency maintained its projection for 2022 regional growth at 2.9 percent.
(Reporting by Fabian Cambero and Aislinn Laing, Editing by Rosalba O’Brien)