The Acting Executive Secretary of ECLAC (Economic Commission for Latin America and the Caribbean), Mario Cimoli, said at a press conference that "the region is facing geopolitical contexts and scenarios that have meant a strong economic slowdown, increases in inflation and a slow and incomplete recovery of labor markets, which will increase poverty levels."
Acknowledging that the Ukraine crisis is a driving factor behind the deteriorating economic situation in the region, the official said that the pandemic, along with the 2018 U.S.-Ukraine trade war, had affected the region long before.
"This is not a single crisis; it is a sequence of crises and reading the Ukraine conflict as a problem on its own is a mistake," Cimoli said.
The United Nations agency forecasts economic growth in the region of only 1.8% for 2022, well below last year's rate of 6.3 percent. Brazil, Paraguay and Chile are the countries most affected by low GDP growth rates, according to ECLAC.
#HumVeNews | REPORT@eclac_un expects the Venezuelan economy to grow by 5% in 2022 | via: @DiarioTalCual— HumVenezuela (@HumVenezuela_en) June 6, 2022
ECLAC’s expectations for the region, as a whole, worsened, falling from the estimated 2.1% to 1.8%.https://t.co/27obBpFCxX (in Spanish) pic.twitter.com/xScM1uS682
Inflation rates have already increased due to the pandemic, which has been compounded by the conflict in Ukraine with a strong impact on food and hydrocarbon trade. Annual inflation in the region reached 6. 6 percent at the end of 2021, moving up to 8.1 percent in April 2022.
According to ECLAC, in 2022, regional poverty will reach 33.7 percent, 1.6 percentage points higher than projected in 2021 for this year, whereas extreme poverty will reach 14.9 percent, 1.1 points higher than last year's estimate.
In this sense, Cimoli said that inflation in Latin America and the Caribbean is a phenomenon that requires special attention since "our central banks have a role that, although not marginal, does not have the same weight," he said, drawing a comparison with the European and U.S. economies.