The post-pan­dem­ic growth that was seen in lat­ter part of 2021 in Latin Amer­i­ca and the Caribbean is be­ing erod­ed to a large ex­tent by the Rus­sia-Ukraine con­flict ac­cord­ing to the Unit­ed Na­tions Eco­nom­ic Com­mis­sion for Latin Amer­i­ca and the Caribbean.

In ECLAC’s Eco­nom­ic Sur­vey of Latin Amer­i­ca and the Caribbean, the re­gion­al macro­eco­nom­ic re­port and out­look for 2022 re­vealed, “The coun­tries of Latin Amer­i­ca and the Caribbean face a com­plex eco­nom­ic and so­cial en­vi­ron­ment in 2022. Weak eco­nom­ic growth is ac­com­pa­nied by strong in­fla­tion­ary pres­sures, slow job cre­ation, falling in­vest­ment and grow­ing so­cial de­mands.”

The re­port said, the com­plex do­mes­tic sit­u­a­tion in the re­gion is com­pound­ed by an in­ter­na­tion­al land­scape in which the war be­tween the Russ­ian Fed­er­a­tion and Ukraine has height­ened geopo­lit­i­cal ten­sions, damp­ened eco­nom­ic growth, re­duced food avail­abil­i­ty and dri­ven up en­er­gy prices, adding to ex­ist­ing in­fla­tion­ary pres­sure caused by sup­ply shocks from the coro­n­avirus dis­ease (COVID-19) pan­dem­ic.

The re­port not­ed the re­gion’s ex­ter­nal de­mand is ex­pect­ed to fall in 2022.

It was point­ed out that pri­or to the war in Ukraine, eco­nom­ic ac­tiv­i­ty was al­ready slow­ing and glob­al GDP was fore­cast to grow by around 4.4% in 2022, down from the 6.1% record­ed in 2021.

How­ev­er as a re­sult of the war, world GDP is ex­pect­ed to ex­pand by 3.1%. In the Unit­ed States, growth of 1.7% is ex­pect­ed, well be­low the 4% fore­cast be­fore the con­flict.

The re­port not­ed that while the con­flict in Ukraine has in­ten­si­fied the pat­tern of ris­es in com­mod­i­ty prices seen since the sec­ond half of 2020, push­ing some prod­ucts to record lev­els this has large­ly hurt sev­er­al coun­tries in the re­gion.

The re­port stat­ed, “Al­though the ris­es in com­mod­i­ty prices have ben­e­fit­ed coun­tries in the re­gion that ex­port com­modi­ties —par­tic­u­lar­ly hy­dro­car­bons and food— on av­er­age the re­gion is ex­pect­ed to see a 7% drop in the terms of trade for com­modi­ties.”

It not­ed that with the ex­cep­tion of Trinidad and To­ba­go and Guyana, the Caribbean large­ly suf­fered due to the rise of hy­dro­car­bon prices.

“The rise in en­er­gy prices is detri­men­tal to hy­dro­car­bon im­porters, par­tic­u­lar­ly coun­tries in the Caribbean (ex­cept Guyana and Trinidad and To­ba­go) and Cen­tral Amer­i­ca, whose terms of trade of com­modi­ties will de­te­ri­o­rate. In South Amer­i­ca, the ef­fect is mixed, as some coun­tries are oil pro­duc­ers, so they are ex­pect­ed to ben­e­fit from the high­er price, but they al­so im­port re­fined prod­ucts, which are cur­rent­ly more ex­pen­sive,” the re­port said.