Narayan AmmachchiLatin America and the Caribbean (LAC) are projected to achieve modest growth of 2.4% in 2025, according to the Economic Commission for Latin America and the Caribbean (ECLAC).
The report highlights that many economies across the region are struggling with resource constraints, hampering their ability to accelerate growth.
Weak consumption and limited production capacity have kept the regional economy subdued for years, and this trend is expected to persist in 2025. The United Nations agency has urged regional governments to mobilize resources to stimulate economic activity and address the ongoing stagnation.
While public spending has remained steady, private consumption continues to lag. Over the past decade, the LAC region’s average annual growth rate was a discouraging 1%.
In 2024, the region is estimated to have closed with growth of 2.2%. For 2025, ECLAC forecasts growth rates of 2.6% for South America, 2.9% for Central America, and 2.6% for the Caribbean, excluding Guyana. However, these modest growth rates are insufficient to generate meaningful job creation.
Nearly half the LAC region’s workforce remains in the informal sector, underscoring structural challenges in labor markets. Alarmingly, employment growth slowed to just 1.7% in 2024, the lowest rate since the onset of the COVID-19 pandemic.
On a brighter note, inflation is on a downward trend. After peaking at 8.2% in 2022, inflation eased to 3.7% by December 2023, with projections for 2024 suggesting a further decline to 3.4%.
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