Latin America and the Caribbean grew only 0.9% in the last decade, according to ECLAC

The Economic Commission for Latin America and the Caribbean (ECLAC) has published a report showing that Latin American countries had an average economic growth rate of 0.9% between 2015-2024. This low growth is seen as a trap by the UN regional commission (United Nations), as it is accompanied by weak investment and low labor productivity.

The Economic Survey of Latin America and the Caribbean 2024: low-growth trap, climate change and employment dynamics also highlights the lack of space to implement reactivating macroeconomic policies as part of this labyrinth that prevents the region from developing, especially in a scenario of global uncertainty.

The assessment is that this low-growth trap is likely to continue this year. The estimated growth for Latin America and the Caribbean is 1.8%. In detail, the commission indicates the growth of the sub-regions.

• South America growing 1.5%;
• Central America and Mexico, 2.2%;
• Caribbean (excluding Guyana), 2.6%.

Expectations for next year are more optimistic and point to growth of 2.3% across the region and 2.4%, considering only South America.

Jobs

Job creation has a strong impact on the observations brought by the study. Low growth goes hand in hand with the employment rate.

“Between 2014 and 2023, the average growth in the number of people employed in the region was 1.3%, a third of that recorded in the 1970s (3.9%)”, the report states.

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Another specter that could keep economic growth going in circles is labor productivity, which will reach its lowest level in 2024 since monitoring began in 1980.

At this point, the organization warns that the occasions of employment growth occurred in sectors where informality is widespread: a situation linked to low productivity. According to ECLAC, the following sectors account for 74.4% of informality and have the lowest productivity: construction, commerce, transport/tourism and services.

Brazil

Specifically regarding Brazil in the last year, the Council notes that the national economy was very successful in surpassing estimates in 2023 and reaching a Gross Domestic Product (GDP) of 2.9%.

This extraordinary result was driven by the return of dynamic exports, which expanded by 9.1%, mainly due to the record agricultural harvest harvested during the year.

Furthermore, another driver of growth in the Brazilian economy last year was household consumption, according to ECLAC. This was due to the strengthening of social policies, including government programs such as Bolsa Família, the real increase in the minimum wage, the reduction in inflation and the new debt renegotiation policy, the Desenrola Brasil program.

“Economic dynamism [brasileiro] translates into an increase of 1.6 million people employed”, the study shows.

*Cepal Information