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Economic growth in Latin America and the Caribbean is expected to slow to 1.9% this year, down from 2.1% in 2023, before picking up again in 2025, according to a report by the World Bank. The region has failed to take advantage of global shifts in supply chains, with public and private investment remaining lackluster. Factors such as high capital costs, low education levels, inadequate infrastructure, and social instability have hindered growth opportunities. Foreign direct investment remains below levels seen 13 years ago, despite the enthusiasm for nearshoring.
The growth forecast of 1.9% is an improvement from previous estimates, but the two largest economies in the region, Mexico and Brazil, are expected to see slower growth. Argentina and Haiti are anticipated to experience economic contractions this year, before returning to growth in 2025. Inequality is a pressing issue across the region, with high taxes on productive investment limiting growth. The report suggests taxing wealth as a way to boost revenue, although it emphasizes the need for careful implementation.
Real estate holds a significant portion of the region’s wealth, making up 80% of total assets. This preference for property ownership reflects a cultural inclination and a hedge against Inflation. The report underscores the challenges of tracking and valuing financial assets compared to real estate.
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Emma Collins, graduated in Financial Economics from the University of Chicago in the USA in 2016. She has since worked at an asset management firm in New York, where she specializes in investment strategies and portfolio management. Emma has a keen interest in financial analysis and has published several articles in renowned financial journals. Her work focuses on providing actionable insights to investors, and she is known for her forward-thinking approach to managing financial portfolios.
