Latin America’s 2024 forecast is bleak, and it may impact U.S. migration, business | Opinion

Several key international institutions have just released their economic forecasts for 2024 in Latin America, and they are pretty depressing.

Before I tell you why I’m not surprised, let’s look at the newly released numbers. According to the World Bank, Latin America will be once again the slowest-growing region in the emerging world.

Latin America’s combined economy will grow by 2.3% in 2024, compared with South Asia’s 5.6%, Asia Pacific’s 4.5%, the Middle East and Northern Africa’s 3.5%, and Sub-Saharan Africa’s 3.8%, the World Bank projections show.

A separate economic forecast from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) says the region’s economy will grow at only 1.9% in 2024, below its 2.2% growth of last year. That may hamper efforts to slow down illegal migration to the United States, and could affect U.S. trade and tourism.

When I asked ECLAC’s head, Jose Manuel Salazar-Xirinachs, in an interview how he expects Latin America’s economy to perform in 2024 compared with last year, he summed it up in two words: “Slightly worse.”

A few countries will do better than the regional average, he told me. Paraguay’s economy will grow by nearly 4%, Uruguay by 3.2% and Caribbean economies will grow by a combined 8.3%, led by Guyana’s phenomenal 29% growth, thanks to its oil discoveries, according to the U.N. economic agency’s projections.

Venezuela will also grow by 4%, but coming from an economic collapse, that makes its current recovery meaningless.

On the other hand, some of Latin America’s biggest countries are expected to grow very little, or suffer economic contractions. Brazil is projected to grow by only 1.6%, Colombia by 1.7% and Mexico by 2.5%, while Argentina is likely to have a negative growth of 1%, ECLAC says.

To put this in perspective, Latin America’s per capita income today is the same as it was in 2013, the U.N. figures show.

Among the reasons for the low expectations for Latin America growth this year will be China’s economic slowdown. Many South American countries depend heavily on their raw material exports to China, and the giant Asian economy has slowed down from 10% growth rates more than a decade ago to 5% rates today.

But among other factors that are causing Latin America’s low growth rates are the region’s chronic populism — countries that spend way above their income — and a failure to attract domestic and foreign investments.

Ironically, populist leftist leaders in Latin America have carried out business-hostile laws that scare away investors, while communist leaders in China and Vietnam have launched business-friendly policies that have turned their countries into magnets for foreign manufacturing firms.

The Jan. 15-19 World Economic Forum (WEF) summit in Davos, Switzerland, was a perfect example of how Latin American countries miss golden opportunities to woo foreign investors.

The meeting was attended by 800 CEOs of leading companies from around the world, as well as by about 60 heads of state, but most Latin American presidents — including the leaders of Mexico and Brazil — failed to attend. The only Latin American heads of state present at the summit were Argentina’s Javier Milei and Colombia’s Gustavo Petro, according to the WEF’s website at the end of the meeting.

The Davos summit would have been a fabulous podium for Mexico’s President Andres Manuel Lopez Obrador to promote his country as an alternative to China for global manufacturing firms.

Many multinational companies are eager to move their factories from China to other countries, for fears that growing U.S.-China tensions may disrupt their supply chains. But many are moving their plants to India and Vietnam, instead of Latin America.

Mexico could have used the Davos meeting to tell CEOs from around the world, “If you are thinking of leaving China, come to Mexico. We are geographically next to the United States, we’re on the same time zone, and our labor costs are similar or lower than China’s.”

Instead, the Mexican president not only failed to attend the Davos summit, he didn’t even bother to send a cabinet member to promote his country there.

So nobody should be terribly surprised by the poor forecasts for Latin America’s growth. Part of the problem is self-inflicted, and few countries are doing something to correct it.

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