[Economics] The World Bank predicts that Ecuador will be the second fastest growing economy in South America in 2022

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It forecasts GDP growth of 4.3%, just below Colombia.

The multinational organization forecasts a growth of the Ecuadorian GDP at 4.3% above the growth in the other countries of the region and just below Colombia. (REUTERS/Santiago Arcos)
Ecuador will be the second fastest growing economy in South America by 2022, according to the World Bank. The multinational organization forecasts a growth of the Ecuadorian GDP at 4.3% above the growth in the other countries of the region and just below Colombia.

This is a much more optimistic outlook than the one calculated by the Central Bank of Ecuador, which announced last week that GDP growth will be 2.8%. Similarly, by 2023, the agency expects the Ecuadorian economy to grow by 3.1% and by 2024 by 2.9%.

 

Ecuador's growth barely detaches itself from the growth of its closest neighbors, since while Colombia will continue to grow at 4.4%, Peru will grow at 3.4%. This latest estimate is a drastic change compared to 2021 because the Peruvian economy closed 2021 with a growth of 13.3% and Colombia with 10.6%.

Guillermo Avellán, general manager of the Central Bank, assures that the new forecast for economic growth in Ecuador and in the region will take into account the impact of the war in Ukraine, as well as the increase in oil prices and external shocks.

Rebounding 6.9% in 2021, the World Bank expects regional GDP to grow 2.3% this year and a further 2.2% in 2023, while most countries are experiencing a sharp turnaround in the GDP that occurred as a result of the global health crisis by COVID19.

These forecasts include subcontinental growth that is among the weakest in the world at a time when the region is experiencing uncertainties caused by the potential mutability of the coronavirus and the war in Ukraine. Even regional growth forecasts were estimated to drop by 0.4% after the Russian invasion of Ukraine.

 

However, like in Ecuador, immunization campaigns were successful in many parts of the region, meaning that commercial and educational activity has resumed. The consequences inherited by the pandemic for the reactivation of the economies, however, persist. The regional poverty rate is projected to rise to 27.5% and remain at a higher level than experienced before the pandemic of 25.6%.

The World Bank affirms that, to avoid a recession like the one suffered during the 2010s, the countries of the region will have to adopt a continually delayed regulatory framework and take advantage of the opportunities offered by the growing green economy.

Carlos Felipe Jaramillo, Vice President of the World Bank for Latin America and the Caribbean, affirms that this is a global context of extreme uncertainty, which could affect the recovery of economies after the impact of the pandemic. It adds that, in the long term, the challenge of climate change will intensify, which requires a rapid transition to a "greener, more inclusive growth agenda that raises productivity," reported Bloomberg.

 

Latin America is beginning to overcome the impact of Covid-19 on economic performance, but some structural difficulties remain for the recovery to reduce poverty in the region.

The World Bank considers that subcontinental growth will be mediocre, in the midst of a situation in which countries face different long-term structural crises, which today also face the global impacts of the war between Russia and Ukraine.

The multinational organization expects Latin America and the Caribbean to grow 2.3% this year and 2.2% next year, a figure that is not only lower than that of January, but is also almost the same rate as in the 2010s. The two largest economies in Latin America, Brazil and Mexico, also recorded significant declines, which improved overall performance. On the other hand, there are countries like Argentina, Bolivia, Ecuador and Colombia whose indicators are now more optimistic.

 

Link: https://www.infobae.com/america/america-latina/2022/04/08/el-banco-mundial-pronostica-que-ecuador-sera-la-segunda-economia-que-mas-crecera-en-sudamerica-en-2022/