The invasion of Russia to Ukraine invoice to Latin America and the Caribbeanlowering its growth expectations between 2022 and 2024, forecast the Inter-American Development Bank (IDB).
The growth scenarios for each of the countries depend on various factors, from their commercial links with Russia to their level of indebtedness, but in general, the IDB foresees that it will decrease compared to the pre-war scenario.
In the worst case, growth would slow from 2.1% to 1.2% in 2022. In 2023 it would be -0.4%instead of 2.4%, and would recover in 2024 to 1.3%, instead of 2.2%, “to later converge again towards a long-term growth of around 2.5%”, indicates the macroeconomic report of Latin America and the Caribbean 2022.
On the fiscal front, the report considers that the war will raise the debt ratio.
Russia is an important market for several of the products that Latin America and the Caribbean exports, such as dairy products and meat (in the Southern Cone, except Brazil) and fruits.
Around 20% of the region’s total fertilizer imports come from Russia, as do more than 5% of total iron and steel imports.
The high price of oil and grains will benefit exporters, while importers, particularly those in Central America and the Caribbean, will suffer higher price increases.
Against this background, the president of the IDB, Mauricio Claver-Carone, advocated this Friday for being “prognosis breakers.”
“It is likely that the increase in the price of raw materials will contribute to growth, to the strengthening of public finances in the countries of the region. There are several countries that import the same products from Russia and Ukraine as from Latin America and the Caribbean. Let’s take advantage of it “, he declared during the presentation of the report.
“Many countries will experience a windfall from their export of raw materials that should not be wasted,” agreed Eric Parrado, chief economist at the IDB.