Economists project Latin America to see moderate growth in 2024

Projection

According to experts, the region should show moderate expansion this year, in line with expectations for global performance

Economists present at the World Economic Forum in Davos, Switzerland, made a “notable increase” in their projections for growth in Latin America and the Caribbean this year. Although optimism has doubled compared to 2023, the region is expected to show moderate expansion this year, in line with expectations for global performance. The information is from the Estadão website.

A survey carried out with 60 chief economists from banks and companies around the world and released at the World Economic Forum this Monday (15), shows that the majority (59%) see the economy of Latin America and the Caribbean with moderate growth in 2024. Last year it was about half that.

For 30%, expansion should still be weak, while 11% denote greater optimism and project strong progress.

“There is a notable increase in growth expectations for Latin America and the Caribbean, Sub-Saharan Africa and Central Asia, although the outlook continues to be for moderate growth globally,”

points out the Chief Economists Outlook survey, published on the first day of the Davos Forum.

In terms of inflation, the majority perspective (63%) is that prices will remain moderate in the Latin America and Caribbean region this year. More than a quarter, however, see the indicator as high.

A significant improvement was seen in the economic outlook for Europe and the United States. The fear of high inflation has reduced drastically, with the proportion of respondents who feared a high or very high indicator falling from 71% and 47% in the survey carried out in September to just 13% in the last edition, in that order.

Two-thirds of chief economists still expect moderate inflation in Europe and the US, while China remains an exception, with 76% of respondents projecting low or very low prices.

As for global Gross Domestic Product (GDP), more than half (56%) expect weak growth this year, with seven in ten projecting an acceleration in the pace of geoeconomic fragmentation. For 43% of economists, global economic conditions will remain unchanged or stronger.

According to the executive director of the World Economic Forum, Saadia Zahidi, the survey reinforces the precarious nature of the global economic environment. “Amid accelerated divergences, the resilience of the global economy will continue to be tested this year,” she says, mentioning financial conditions that are still restrictive despite the drop in inflation and the increase in global tensions, especially geopolitical ones, as well as inequalities.

However, most economists interviewed expect financial conditions, as well as the labor market, to be more flexible in 2024.

Global inflation continues to decline, supporting expectations of a slight decline in interest rates throughout the year, they project. Global inflation is expected to fall to 4.8% in 2024, a sharp decline compared to 5.9% in 2023 and 9.2% in 2022, they say, citing projections from the International Monetary Fund (IMF).

Among the economists who participated in the survey published at the Davos Forum, there are names such as Brazilians Mansueto Almeida, from BTG Pactual, Fernando Honorato Barbosa, from Bradesco, Mário Mesquita, from Itaú Unibanco, and also international ones such as Karin Kimbrough, from LinkedIn, Hal Varian, from Google, Paul Donovan, from UBS, and Pierre-Olivier Gourinchas, from the International Monetary Fund (IMF).

The research was carried out between November and December 2023.

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