Nearshore Americas

Global Warming Could Deal Devastating Blow to LATAM’s Economy: Moody’s

Latin America faces the possibility of economic devastation due to global warming.

A report by Moody’s Analytics points to the possibility of the region’s GDP being reduced by 16% by the end of the century due to global warming.

Several areas within the region are already seeing the negative consequences of climate change. The Caribbean is preparing for hurricane season as the summer months approach; Chile has just extinguished a forest fire that had been burning for weeks.

Countries that produce and consume more gasoline and diesel fuel will be the main victims of global warming. Serious risks are predicted for the region’s major producers of fossil fuels, such as Colombia, Brazil, Venezuela and Mexico.

Pointing to rising rates of climate disasters elsewhere in the world, the report warned “it is better to make policy decisions to cut emissions earlier than later.”

The damage to infrastructure from excessive rainfall and flooding will test the region’s resilience. Climate disasters also fuel inflation and reduce economic output, leaving central banks with fewer options to stimulate the economy.

If no precautionary measures are taken, the inflation rate could rise sharply from 2030 onwards, the report added.

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To withstand the worst effects of climate change, according to the Inter American Development Bank, Latin America will have to spend between US$500 billion and US$1,300 billion through 2030, concentrating solely on decarbonized growth.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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