ECLAC predicts 1.8 per cent economic growth for LAC this year

SANTIAGO, Chile, CMC – The Economic Commission for Latin America and the Caribbean (ECLAC) Tuesday said that the region's economies will expand by 1.8 per cent this year and 2.3 per cent in 2025.

ECLAC released its annual report titled “Economic Survey of Latin America and the Caribbean 2024: Low Growth Trap, Climate Change and Employment Trends” in which it stresses that the region remains stuck in a trap of low growth accompanied by poor investment performance and low labour productivity.

It said this is compounded by limited domestic space for implementing macroeconomic policies for a reactivation as well as global uncertainty.

The report was presented at a news conference by ECLAC's Executive Secretary José Manuel Salazar-Xirinachs.

According to the publication, over the last decade, Latin American countries have exhibited low economic growth, with an average rate of 0.9 per cent in the 2015-2024 period. For that reason, the report indicates that energising growth is a paramount task for the region to be able to respond to the environmental, social and labour-related challenges being faced today.

“Tackling the growth trap, increasing employment and creating jobs with higher productivity requires strengthening productive development policies that are complemented by macroeconomic and labour policies as well as those on climate change adaptation and mitigation,” said Salazar-Xirinachs.

ECLAC's Economic Survey 2024 projects that Latin America and the Caribbean will remain on a low growth trajectory this year, at an average rate of 1.8 per cent. This slow growth is expected to be observed in all the subregions.

South America is seen growing by 1.5 per cent; Central America and Mexico by 2.2 per cent; and the Caribbean, without including Guyana, by 2.6 per cent.

Next year, 2.3 per cent growth is expected for the region as a whole, with the increase attributable to South America's performance, which will reach 2.4 per cent.

The report also analyses the impact of the low-growth trap and climate change on employment trends.

The main results indicate that growth and job creation are closely related at an aggregate and sectoral level.

Between 2014 and 2023, average growth in the number of persons employed in the region was 1.3 per cent, a third of what was recorded in the 1970s (3.9 per cent).

Furthermore, a fall in labour productivity was confirmed, with the 2024 figure expected to be below the level seen in 1980.

In addition, employment growth is due mainly to an increase in informal employment, particularly among women. Like the dynamics of overall employment, informality is concentrated in sectors with lower productivity, especially construction, commerce and transportation.

With regard to the impact of climate change on employment, ECLAC's report details a scenario in which, to the extent that investments in adaptation and mitigation are not made, the intensification of climate change-related shocks could prompt a loss of nearly 43 million jobs or 10 per cent of the labour force, from now until 2050, with 15 million of them being lost in the agricultural and tourism sectors.

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