World Bank’s report highlights slow economic growth of Latin America and Caribbean

The World Bank shared data on economic consistency in Latin America and the Caribbean that highlighted the slowing growth of the region to 1.9 per cent in 2024. The economic growth of the region is seen below the mark of 2.1 per cent, which was recorded last year in 2023.

The experts mentioned that this rate of economic growth in Latin America and the Caribbean is the result of multiple missed opportunities. It is seen that the region and stakeholders consistently failed to take advantage of the foreign markets and to affect the global supply chains in their favour.

The report on economic growth by the World Bank also mentioned that the promise of growth opportunities has gone unfulfilled, even after the public and private investments were underwhelming. The reports highlighted some points to focus on as the reason for such results, like low education, social instability, high cost of capital, and subpar infrastructure.

As per the report, foreign direct investment in Latin America and the Caribbean was recorded at lower levels than expected. However, the mark of 1.9 per cent came as a betterment in economic growth compared to the previous calculations.

In the month of April, the figure was 1.6 per cent, which accelerated in the month of June with 1.8 per cent. The two largest economies of the region are Brazil and Mexico, which have also seen a slowdown in the growth rate. The economic growth of Brazil is forecasted to stay at 2.8 per cent this year, which is a bit lower than 2.9 per cent growth in 2023.

The data on the economic growth of Mexico has seen a massive fall, which is mentioned in the report to be just around 1.7 per cent this year. This is not just less than the average rate in Latin America and the Caribbean but also around half of 2023’s growth, which was 3.2 per cent.

However, the report by the World Bank also mentioned that the region of Latin America and the Caribbean improved in the next year. It is expected that the region will see economic growth of 2.6 per cent in 2025. The latest forecast for 2025 saw a small dip in the number, which was previously mentioned to be 2.7 per cent.

The economic experts of the World Bank mentioned in the report that inequality was seen very high in the region, and the high taxes on productive investment also became the reason to marginalise the growth rate. The report mentioned that taxing must be done with care to balance the economy.