The Economic Commission for Latin America and the Caribbean (ECLAC) says that the ongoing Ukraine crisis is worsening price increases and financial risk in the Latin American and Caribbean (LAC) region. Guyana, however, should record larger economic growth than previously expected.
New estimates released by ECLAC on Wednesday indicated that Guyana should experience a 49 per cent GDP growth rate this year. This is an upward revision from the 46 per cent growth rate projected in January 2022.
Gross Domestic Product (GDP) simply refers to the monetary value of all finished goods and services made within a country during a specific period (such as a year).
And importantly, Guyana’s increased growth projection comes amid concerns flagged by ECLAC due to the ongoing Ukraine/ Russia crisis.
“The economies of Latin America and the Caribbean face a complex juncture in 2022 due to the war between Russia and Ukraine, which ushers in a new source of uncertainty for the world economy,” ECLAC’s acting Executive Secretary Mario Cimoli said during a meeting on Wednesday at United Nations headquarters in New York.
Cimoli, according to an ECLAC press release, further noted that the conflict in Ukraine has heightened price increases- leading to increased financial risks and costs- in the region.
Based on new ECLAC projections, the LAC region’s growth rate in 2022 is now projected at 1.8 per cent. In January, before Russia’s invasion of Ukraine, a 2.1 per cent growth rate was expected in the region.
Separating growth rates, the new ECLAC figures indicate that Latin America is now expecting a 1.7 per cent rate of GDP growth; South America is expecting a 1.5 per cent rate; Central America and Mexico, a 4.2 per cent growth rate; and, the Caribbean, a 10.1 per cent growth rate.
Importantly, the growth rate expected in the Caribbean, excluding Guyana, is pegged at 4.7 per cent this year. And the growth rate expected in Central America, excluding Mexico, is pegged at 4.2 per cent.
South and Central Americas are the subregions expecting higher economic growth than had been projected at the beginning of 2022. Latin America, Central America and Mexico and the Caribbean are expecting lower growth rates.
Meanwhile, ECLAC also noted that the conflict in Ukraine is also expected to negatively affect world trade dynamics, causing a decrease in foreign demand in the LAC region.