The economy of Latin America and the Caribbean is expected to maintain moderate growth during 2026 , in a scenario marked by geopolitical tensions, disruptions in logistics routes and uncertainty in trade policy, according to the Economic Commission for Latin America and the Caribbean (ECLAC) .

In the case of Mexico, the organization estimated that the Gross Domestic Product (GDP) will grow 1.6% this year and 2.2% by 2027 , according to the report “Latin America and the Caribbean: GDP growth projections 2026 and 2027” .

The projection represents an upward adjustment compared to ECLAC’s estimate from last August, when it predicted that Mexico would grow 1.3% in 2026 and 1.9% next year.

Even with the increase, these rates are lower than those projected for Latin America and the Caribbean: 2% for 2026 and 2.5% for 2027.

The regional outlook is shaped by an international environment that combines weaker demand prospects, increased pressure on energy and food prices, and less favorable financial conditions. These factors could drive up the cost of inputs, transportation, and imports , as well as reduce household purchasing power.

The impact, however, will not be uniform. Commodity-exporting economies could benefit from higher international prices, while importing countries would face increased costs that would put pressure on both businesses and domestic consumption.

ECLAC warned that job creation continues to grow, albeit at a slower pace . This is compounded by an upward trend in inflation, driven primarily by rising energy and food prices.

Financing presents another challenge. Higher international inflationary pressures and increases in interest rates in developed economies could make credit more expensive for governments, businesses, and consumers, with potential effects on investment.

In that context, the ability of Latin American economies to sustain consumption and investment will be crucial for the growth projected for 2027 to materialize.

Differences between the subregions

ECLAC projections show different behaviors among the economies of Latin America and the Caribbean.

In that sense, South America would grow 2.1% in 2026 and 2.4% in 2027, while Central America would register advances of 1.7% and 2.8%, respectively.

In Central America, the overall result is influenced by the performance of Cuba and Haiti. Excluding both economies, the average projected growth for the subregion would rise to 4.1% in 2026 and 4.2% in 2027.

For the Caribbean , the organization estimated growth of 7.4% in 2026 and 7% in 2027, figures that primarily reflect Guyana’s performance. Excluding Guyana, growth would be 1.2% and 1.9%, respectively.

These differences reflect countries’ unequal exposure to international prices, trade and financial conditions, and their productive capacities.

Productive development to boost growth

Given the prospect of limited growth, ECLAC suggested strengthening productive development policies and promoting integrated formalization strategies , with the aim of increasing productivity, expanding investment and generating formal and quality jobs.

The organization proposed coordinating labor, fiscal, financial, and production policies to boost the capabilities of companies and facilitate more inclusive and sustainable growth.

The outlook for 2027 will also depend on the evolution of global demand, commodity prices, financial conditions and the possible effects of the El Niño phenomenon.

For Mexico and the rest of the region, the challenge will be to convert macroeconomic stability into greater productive dynamism, in a context where costs, financing and international uncertainty will continue to condition investment decisions.

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El cargo ECLAC anticipates moderate growth for Mexico in 2026; uncertainty would put pressure on costs and investment apareció primero en T21.

The value of goods exports from Latin America and the Caribbean is expected to grow by 20% during 2026 , which would be its biggest increase since the post-pandemic recovery in 2021, according to the Economic Commission for Latin America and the Caribbean (ECLAC) .

According to the report “International Trade Outlook for Latin America and the Caribbean 2026: The Importance of Modern Service Exports and How to Promote Them ,” this growth would be driven by an 11% increase in export prices and a 9% increase in trade volumes. However, performance would be uneven across subregions; while South America benefits from rising commodity prices, Mexico would stand out due to the dynamism of its manufactured exports .

On the import side, ECLAC projected a regional growth of 16% in value, resulting from a 12% increase in volumes and a 4% increase in prices, associated with the recovery of domestic consumption and greater demand for intermediate inputs and capital goods .

This behavior in merchandise trade is also reflected in services linked to its movement . The organization estimated that regional service exports will grow by 11% in 2026, driven by the recovery of transport and travel, as well as by the dynamism of modern services.

The analysis noted that trade in goods has increased demand for international logistics and transport services , while tourism has boosted travel exports, particularly in Central America and the Caribbean.

Even with these favorable prospects, ECLAC warned that international trade faces risks related to geopolitical tensions, disruptions in logistics routes and uncertainty in trade policies , in a context of reorganization of global value chains.

“The region faces significant challenges in an uncertain geopolitical environment. Geopolitical tensions, disruptions to logistics routes, and a lack of predictability in trade policy pose risks to trade,” emphasized José Manuel Salazar-Xirinachs, Executive Secretary of ECLAC.

The main image was generated using artificial intelligence.

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El cargo Trade in Latin America and the Caribbean is expected to grow in 2026; Mexico is projected to stand out for its manufacturing exports: ECLAC apareció primero en T21.

Due to increased investor caution regarding changes in U.S. tariff policy, Foreign Direct Investment (FDI) inflows to Mexico totaled $43.221 billion , the third highest value since 1990, although this figure represented a 5% decrease, according to the Economic Commission for Latin America and the Caribbean (ECLAC) .

Reinvestment of profits was the largest component (64% of the total), despite a slight year-on-year decrease of 3.7%, and capital contributions grew in relation to what was received in 2024 (78.1%), the organization explained in the report “Foreign Direct Investment in Latin America and the Caribbean 2026: navigating the new global context” .

According to the study, services and manufacturing accounted for almost all FDI, with 59% and 36%, respectively.

In that sense, the services sector registered a marked increase of 60% in foreign capital inflows compared to 2024, while in manufacturing they decreased by 25.5%, after the pronounced increase they had experienced in 2023 and 2024.

“Investment in Mexico’s manufacturing industry , and particularly the automotive industry, has shown an upward trend over the last 20 years. In 2023 and 2024, a marked increase in investment was recorded, which was not sustained in 2025, and investment in the manufacture of transportation equipment fell by 31.3 percent. Nevertheless, with 46% of total manufacturing investment, the automotive sector remains the industry with the highest investment in the country, and the amount of investment in 2025 exceeds the average received during the 2010s,” he noted.

Meanwhile, the value of announced projects in Mexico totaled $25,075 million , representing a 43% reduction compared to 2024, but was in line with the average values ​​of the 2010s.

“The decrease was associated with less activity in sectors that have traditionally received large announcements, such as the automotive industry (-65%), communications (-76%) and the coal, oil and gas sector (-99.9%), which, after a record amount in 2024, had almost no announcements in 2025,” he stressed.

Despite the decline, some sectors saw an increase in announcements: in renewable energy, the US company Transition Industries announced a low-carbon methanol production project, while in the software and IT services sector, Tata Consultancy Services, an Indian firm, announced the opening of a new office that is estimated to employ five thousand people.

ECLAC stated that, to the extent that Mexico manages to scale up and improve its productive development policies, particularly through the efforts it has been making with the Mexico Plan , it will be able to take better advantage of opportunities to attract foreign capital.

FDI in Latin America and the Caribbean

As for Latin America and the Caribbean, the region attracted $194.233 billion, an increase of 1.7% year-on-year , although this increase occurred unevenly among countries and economic sectors.

“The structures and dynamics of FDI attraction within the region are very heterogeneous. Brazil and Mexico accounted for 62% of total inflows in 2025,” ECLAC noted.

According to the report, after Brazil and Mexico, the countries that received the most foreign capital were Chile, Peru, Colombia, Guyana, Costa Rica, and the Dominican Republic .

The agency indicated that reinvestment of profits represented 51% of FDI in the region; followed by capital contributions (34%) and intercompany loans (15%).

The analysis also highlighted that regional cross-border mergers and acquisitions saw a moderate uptick in 2025, centered on 351 deals, representing a year-on-year increase of 7.7 percent.

Meanwhile, 67% of the investment flow came from the United States and Europe, and he pointed out that last year 1,326 projects were announced for a total of $114.1 billion in the region.

“In the midst of a complex international scenario, characterized by the geopolitical context derived from the United States’ trade policy, investment announcements towards the region fell 34.3%,” he stated.

Given this scenario, ECLAC recommended diversifying export markets and investment origins , strengthening regional coordination spaces, and better preparing human capital to meet the economic challenges of the area.

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El cargo US tariffs hit foreign direct investment in Mexico: ECLAC apareció primero en T21.

The Mexican economy could grow by 1.5% in 2026 , the Economic Commission for Latin America and the Caribbean (ECLAC) estimated , due to tensions in the global environment and the application of current restrictive financial conditions.

This projection represents an increase if one considers that the country’s real Gross Domestic Product (GDP) in 2025 was 0.8% compared to 2024, according to data from the National Institute of Statistics and Geography (Inegi) .

In its report, ECLAC adjusted its regional growth projection to 2.2% for 2026 , a decrease from the 2.3% estimated by the organization in December of last year. The report indicated that the contraction reflects current global tensions, such as the conflict in the Middle East and tariff policies.

“The deterioration of the external environment is one of the main factors behind the downward revision of regional growth projections,” he said.

According to the organization’s data, growth is projected to slow in 24 of the region’s 33 countries in 2026, while only seven are expected to show an increase. This would mark four consecutive years of projected growth close to 2.3% for the region, “demonstrating a pattern of weak growth potential.”

At the subregional level, South America would grow 2.4% in 2026 , below the 2.9% achieved in 2025, “reflecting a slowdown in most of the economies of the subregion,” according to the most recent projections of ECLAC.

Central America is projected to grow its economy by 2.2% this year , a slight contraction compared to the 2.3% growth forecast for 2025, influenced by anticipated contractions in Cuba and Haiti.  The English- and Dutch-speaking Caribbean is projected to grow by 5.6% , a slight increase from the 5.5% forecast for 2025, driven by projected economic activity in Guyana.

The conflict in the Middle East and geopolitical tensions increased volatility in commodity and financial markets. The price of oil during the first three weeks of April exceeded the average price recorded in December 2015 by 74% , raising production and transportation costs globally, according to the technical report.

ECLAC noted that the World Trade Organization (WTO) projected a 2.7% increase in the volume of trade in goods and services in 2026. This figure contrasts with the 4.7% growth achieved in 2025, indicating a slowdown in the dynamism of global international trade. Meanwhile, central banks are maintaining cautious stances in the face of renewed pressure on consumer price indices.

Regional private consumption is showing less dynamism, while investment is showing signs of a recovery, albeit at moderate levels. Employment growth in the region’s economies is estimated at 1.1% in 2026, compared to 1.5% in 2025 .

Meanwhile, median inflation would be above 3%, due to the rise in imported inputs and logistics expenses, compared to 2.4% last year.

According to the United Nations regional economic commission, risks persist linked to the volatility of international markets and the weakness of domestic demand in countries; in addition to structural factors and constraints of space in public policies that affect the performance in various economies of the region analyzed.

Given this scenario, ECLAC emphasized the need to expand the mobilization of internal and external resources , and to strengthen governance to promote policies that boost investment, increase productivity and strengthen macroeconomic resilience, in a global environment where uncertainty prevails.

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El cargo ECLAC projects Mexican GDP growth in 2026; global tensions hold back Latin America apareció primero en T21.

Tariff uncertainty, weak domestic consumption and a drop in investment will affect the Mexican economy, so the country’s Gross Domestic Product (GDP) would barely grow 0.4% in 2025 , estimated the Economic Commission for Latin America and the Caribbean (ECLAC) .

In presenting the Preliminary Overview of the Economies of Latin America and the Caribbean 2025 , the organization also projected that the Mexican economy could grow 1.3% in 2026 , due to factors such as greater trade certainty, as well as the possible ratification of the United States-Mexico-Canada Agreement (USMCA) and the positive effects of the World Cup on tourism.

At a press conference, José Manuel Salazar-Xirinachs, executive secretary of ECLAC, explained that low productivity growth, as well as lower investment and poor educational performance, are factors that prevent Mexico from achieving sustained growth.

“To increase its growth, Mexico must, among other things, scale up productive development policies, accelerate productive transformation, increase investment levels, and improve access to and quality of educational learning,” Salazar-Xirinachs explained.

Regarding the estimate for Latin America , ECLAC predicts that the regional GDP could reach 2.4% in 2025 and 2.3% in 2026 , which, if confirmed, would represent four years of low growth for the area.

According to the report, growth projections for 2025 and 2026 are influenced by uncertainty, mainly caused by tariffs around the world.

The report highlighted differences in the trajectories of economic activity at the subregional level, where South America would grow 2.9% in 2025 , driven by the recovery of Argentina, Bolivia and Ecuador after contractions in 2024. For 2026 a slowdown to 2.4% is projected , due to lower growth in most of its economies.

Central America is expected to grow by 2.6% this year , affected by weakening US demand, although an improvement to 3% is expected by 2026. However, vulnerabilities related to trade, remittances, access to financing, and exposure to climate change persist.

According to the preliminary assessment, the Caribbean would grow 5.5% in 2025 and 8.2% the following year , “bolstered by the significant growth of oil activity in Guyana, and supported by the normalization of tourism and improved performance in construction.”

According to the agency’s estimates, job growth will also lose momentum: 1.5% in 2025 and 1.3% in 2026. Meanwhile, regional inflation is expected to reach a median of 3% in 2026, higher than the 2.4% estimated for the end of 2025.

“The region has many assets for trading with the world, such as natural resources and productive capacities, but strategic policies are needed to realize the opportunities in Latin America and the Caribbean,” said José Manuel Salazar-Xirinachs.

The ECLAC executive secretary pointed out that the issue of uncertainty and volatility caused a lot of damage to emerging economies, and indicated that Latin America must diversify its markets and strengthen the ties with which it sustains trade exchanges .

“It is in Latin America’s best interest to diversify markets, investment, and trade, as this is necessary to achieve progress in their economies,” he noted.

ECLAC’s analysis warned that the region’s growth will depend on the dynamics observed in both global GDP growth and global trade. It will also be affected by the stance of monetary policy in the United States, uncertainty in international financial markets, and the potential volatility of external financing flows, including foreign direct investment and remittances, which could impact regional growth in 2026.

Among other factors, GDP growth can be affected by the performance of labor markets and their impact on household income.

In response, ECLAC urged strengthening and expanding the scope of macroeconomic policy .

José Manuel Salazar-Xirinachs argued that to escape the “low growth capacity trap”, more ambitious productive development policies are needed, combined with macroeconomic policies that move more resources towards growth, innovation, economic diversification, productive transformation and the creation of quality jobs.

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El cargo ECLAC projects low economic growth for Mexico in 2025 apareció primero en T21.

Announcements of Foreign Direct Investment (FDI) projects in Mexico in the transportation and storage sector for the period 2020-2024 amounted to more than one billion dollars (mdd), on average, per year, revealed the Economic Commission for Latin America and the Caribbean (ECLAC) , which detailed that in the countries of the region the industry received only 3% of the total of these investments last year.

According to the Foreign Direct Investment in Latin America and the Caribbean 2025 report , prepared by the aforementioned organization, investment announcements in the logistics sector in Mexico averaged close to two billion dollars per year from 2010 to 2019.

At the report’s presentation, José Manuel Salazar-Xirinachs, Executive Secretary of ECLAC, emphasized that Mexico has a positive investment environment, as well as clusters for economic development and a strong logistics chain.

In this regard, he emphasized that the country is best positioned to attract FDI in Latin America and the Caribbean within the framework of the phenomenon of relocation of production lines, known as nearshoring .

According to the report, Mexico received the second-largest amount of FDI in the region in 2024, with net inflows of $45.337 billion, representing a 48% increase compared to 2023 and the highest annual figure since 2013.

José Manuel Salazar-Xirinachs noted that the integration of the Mexican economy with that of the United States under the context of nearshoring could pose risks, especially due to the recent economic policies promoted by its northern neighbor. However, there is also “a great deal of common interest between the two countries.”

In terms of sectors, manufacturing was the largest net driver of FDI in Mexico, experiencing a 10% increase in inflows compared to 2023 and also accounting for 53% of the 2024 total.

For his part, Marco Llinás, director of ECLAC’s Productive and Business Development Division, believes that FDI in Mexico will increase as the country improves its efforts to attract foreign capital through Plan Mexico , especially given the economic uncertainty affecting the world due to protectionist policies.

According to the ECLAC report, FDI in Latin America and the Caribbean in 2024 reached 188.962 billion dollars (mdd) , which represented an increase of 7.1% compared to 2023.

The 2024 growth in FDI components was driven by transnational corporations already operating in the region, mainly due to increases in profit reinvestment, while capital inflows remain stagnant.

In 2024, FDI inflows increased in the Caribbean, Central America, and Mexico, while results in South American countries were mixed. Brazil saw a 13.8% increase in FDI inflows, while Mexico saw a 47.9% increase in the period.

“At ECLAC, we believe that Latin America and the Caribbean must leverage foreign direct investment to achieve more productive, inclusive, and sustainable development. To achieve this, it will be key to use FDI as a strategic tool within productive development policies,” emphasized José Manuel Salazar-Xirinachs.

According to the report, during the reference period, there was an increase in FDI inflows to manufacturing and a decrease in the services sector, with the share of FDI in both sectors remaining similar, at 43.6% and 40.4%, respectively.

The analysis indicated that the United States consolidated its position as the largest investor in Latin America and the Caribbean, with 38% of the value invested in 2024, and the European Union’s share fell to 15% of the regional total, representing the lowest figure since 2012. Meanwhile, FDI from China accounted for just 2% of total inflows in 2024.

Meanwhile, regarding the behavior of Latin American transnational corporations, known as translatinas, the report showed that outward FDI from the region increased 47% last year, reaching $53.033 billion . Brazil was the largest investor abroad, accounting for 46% of the total, while investments from Mexico showed the greatest growth.

The report also highlighted FDI in the mining sector. Between 2005 and 2024, 1,152 project announcements were made, totaling US$230,065 million.

Furthermore, the analysis highlighted that while there has been progress in digitalization in Latin America and the Caribbean, significant gaps in technological adoption persist .

Mexico and Brazil accounted for 32% and 29%, respectively, of the FDI associated with project announcements accumulated between 2005 and 2024. When Argentina, Chile, and Colombia are added, this group of countries accounts for more than 80% of the total in the region.

It is worth remembering that during the first quarter of 2025, Mexico reached  21.4 billion dollars (mdd) in Foreign Direct Investment , which meant an increase of  5.4% compared to the same period in 2024, according to the Ministry of Economy .

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El cargo FDI in logistics in Latin America represents only 3% of the total received in 2024 apareció primero en T21.

The Economic Commission for Latin America and the Caribbean (ECLAC) announced on Tuesday its new growth estimates for this year for the region, where it noted a reduction from 2.4%, projected by the end of 2024, to 2 percent .

Under the new projections, Mexico and Central America will be among the regions hardest hit in terms of growth this year, dropping from 1.8 percent to just 1.0 percent . Another region where growth slowed was the Caribbean, which went from a projected growth of 2.3 percent to 1.8 percent .

According to ECLAC, the region is facing a highly uncertain international scenario due to the tariffs imposed by the United States, which have not only directly affected the region’s exports but have also caused greater volatility in international financial markets .

Furthermore, the so-called trade war  has increased the risk of serious disruptions in global production chains and international trade flows, leading to a downward revision of global growth prospects .

Finally, ECLAC noted that if the region wants to boost its growth, it requires a combination of macroeconomic and productive development policies, increasing investment in physical and human capital. Therefore, the region must not only invest more, but also invest better .

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El cargo ECLAC cuts economic growth for Latin America apareció primero en T21.

In the presentation of the report International Trade Outlook for Latin America and the Caribbean 2024: Reconfiguration of global trade and options for regional recovery , the Economic Commission for Latin America and the Caribbean (ECLAC) projected moderate growth in the region’s exports of goods, estimated at 4% for 2024.

This increase will be driven mainly by an expansion in export volumes , while prices will generally remain low.

The case of Mexico is notable in the projections, where a growth in the value of goods exports of 2% is expected, driven by the manufacturing sector, although with a performance slightly below the regional average.

The report also highlights that travel and modern services are projected to be the main drivers of growth in regional services exports, accounting for more than 80% of the total increase (with seven percentage points attributed to travel and three percentage points to modern services).

In the case of the tourism sector , this clearly reflects its continued recovery after the strong impact it suffered due to the pandemic.

According to ECLAC, the reconfiguration of global trade , marked by geopolitical tensions and rising protectionism, is also creating a growing need for companies to bring their supply chains closer to strategic markets.

In this context, Mexico stands out for its location and its consolidated industrial infrastructure and its network of trade agreements that allow it to integrate competitively into global production processes.

They highlighted that Mexico already has strong development in sectors such as the automotive and electronics sectors , and could benefit even more from this trend of global political tensions, if it continues to implement productive development policies focused on innovation and public and private collaboration, thus ensuring its competitiveness in the new scenario of global trade.

“Mexico is ideally positioned to benefit from the ongoing reconfiguration of global value chains, given its strategic geography and vast network of trade agreements,” said José Manuel Salazar-Xirinachs, Executive Secretary of ECLAC.

Salazar-Xirinachs also commented that, despite these advances, the country faces challenges such as the diversification of its export markets, where more than 80% of its exports are destined for the United States .

Additionally, it was highlighted that by the end of 2024, South America will see the largest trade surpluses in goods, with Brazil, Argentina, Chile and Peru leading in this area.

In contrast, the Caribbean trade deficit is expected to narrow from $22 billion in 2023 to $13 billion in 2024, largely thanks to an increase in Guyana’s surplus.

In Central America , on the other hand , the trade deficit in goods will increase, from 46 billion dollars to 53 billion dollars. In terms of trade in services, Mexico will be the country that will experience the greatest reduction in its deficit, which will fall from 19 billion dollars to 5 billion dollars.

ECLAC also highlighted the importance of international trade in food supply, especially for countries that are highly dependent on imports.

For his part, Keiji Inoue, officer in charge of ECLAC’s International Trade and Integration Division, noted that international trade plays a crucial role in food security .

“This allows countries to access food that they cannot produce locally due to climatic or technological conditions,” Inoue said.

The report also included a series of key recommendations to strengthen trade in the region, such as the implementation of productive development policies based on a cluster approach and close collaboration between the public and private sectors.

He also stressed the importance of harmonising sanitary and phytosanitary regulations and improving food trade logistics .

Finally, the report’s presentation urged governments to improve the digital and linguistic skills of the population in order to take advantage of the potential of modern services, the global demand for which is growing.

Likewise, it was recommended to sign agreements to facilitate trade in digital services and attract foreign direct investment in this sector.

(Main photo source: ECLAC social media)

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El cargo Latin America projects moderate growth in exports of goods and services in 2024: ECLAC apareció primero en T21.

The Economic Commission for Latin America and the Caribbean (ECLAC) presented its Economic Study 2024 , which paints a panorama where Latin America and the Caribbean will grow only 1.8% in 2024 and 2.3% in 2025, figures that, according to the analysis, project the weak economic recovery, in the midst of an environment marked by low investment, low labor productivity and limited fiscal space.

The report, presented in Santiago, Chile, by the executive secretary of ECLAC, José Manuel Salazar, and the director of the institution’s Economic Development division, Daniel Titelman, highlights that the region has experienced an average annual economic growth of just 0.9% between 2015 and 2024.

“The region is mired in three traps: one of low capacity to grow, one of high inequality and low social mobility, and a third of low institutional capacity and very weak governance,” explained José Manuel Salazar.

According to specialists, this period, which is already considered by some as a “second lost decade” , reflects a stagnation that contrasts with the relative prosperity of the first decade of the 21st century.

By 2024, South America is projected to grow by 1.5%, while Central America and Mexico would grow by 2.2%, and the Caribbean, excluding Guyana, by 2.6 percent.

In this sense, the study explains that low economic growth has had a significant impact on the labor market . Between 2014 and 2023, the average growth in the number of employed people was only 1.3%, much lower than the 3.9% recorded in the 1970s.

Furthermore, labor productivity has shown a notable deterioration , since at the end of 2024 it is estimated that it will be even lower than that recorded in 1980.

For ECLAC, this stagnation has not only limited job creation, but has pushed the majority of new workers towards informality , especially in low productivity sectors such as construction, commerce and services, which currently account for 74.4 % of informally employed people.

ECLAC also warns that, in a scenario where significant investments in adaptation and mitigation are not implemented, the effects of climate change could intensify , resulting in the loss of up to 43 million jobs by 2050, which would represent close to 10% of the workforce of the region.

“The comprehensive approach of a new generation of productive development policies that we are promoting at ECLAC is essential to get out of the low growth trap. We should not be shy about making sectorial bets, especially now, given technological change and the need for sustainability,” said Daniel Titelman, director of the Economic Development Division of ECLAC.

The sectors most vulnerable to these impacts would be agriculture and tourism , with a possible loss of 15 million jobs in these two sectors alone.

What projections are there for Mexico?

In the regional context, the country faces particular challenges. Mexico’s Gross Domestic Product (GDP) grew by 3.2% in 2023, slowing slightly compared to 3.7% in 2022.

Despite this growth, ECLAC estimates that in 2024 the Mexican economy will only grow 1.9% , mainly due to the economic slowdown in the United States, its main trading partner, and an internal slowdown in consumption and investment.

The report highlights that, although inflation in Mexico has decreased to 4.7% at the end of 2023, it is still outside the target range (2 – 4%) of the Bank of Mexico , which has forced the central bank to maintain inflation rates. high interest.

The unemployment rate, for its part, was reduced to 2.8% in 2023, but labor informality remains a significant problem , with a rate of 53.6%, just below the 54.9% in 2022.

Consequently, by 2024, inflation would remain around 4.5% and the fiscal deficit of the non-financial public sector would reach 5.0% of GDP, the highest level since 1990, due to the financing of emblematic infrastructure projects of the current government.

Additionally, the net debt of Mexico’s non-financial public sector increased to 49.5% of GDP at the end of 2023, compared to 47.6% in 2022, largely due to the high cost of debt service, which grew 20.9% during the year, reaching 3.3% of GDP.

Regarding fiscal policy in Mexico , it has been expansive, with an increase in social spending and investment in infrastructure; however, the ECLAC report highlights that this approach has generated a growing public deficit and limited fiscal space. for future economic interventions.

Monetary policy , on the other hand, has been restrictive, with interest rates that, although they have begun to reduce, remain high compared to pre-pandemic levels. This combination of policies poses a challenge for the country’s macroeconomic stability in the short and medium term.

The ECLAC Economic Study 2024 concludes with a call to action, since, to break the trap of low growth, the region needs to implement structural reforms that include productive development policies, a significant increase in public and private investment, as well as effective measures to confront climate change.

This report is one of the most important of ECLAC, since it offers a critical vision of the economic present of Latin America and the Caribbean and proposes a set of key recommendations so that the governments of the region can overcome the current challenges and avoid a third lost decade.

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El cargo New Decade of Loss! ECLAC Warns of Economic Stagnation apareció primero en T21.