ECLAC: Latin American and Caribbean trade to increase in 2021

According to a report by the Economic Commission for Latin America and the Caribbean (ECLAC) released this Tuesday (7), international trade in the region will have an important recovery in 2021. The growth comes after a sharp drop observed last year. Recovery, however, will not be the same in all countries because of the uncertainty caused by the new coronavirus pandemic.

According to the 2021 Latin American and Caribbean International Trade Perspectives report, there will be a 25% increase in the value of regional exports of goods this year after a 10% drop in 2020.

This increase is driven by a 17% rise in export prices and an 8% expansion in export volume.

The expectation for 2022 is an increase of 10% in the value of regional exports of goods and 9% in imports, even with lower growth in the regional and world economy.

South America registered the biggest increase in exported value in 2021, 34%, benefiting especially from the higher prices of raw materials. In the Caribbean, the increase in exports is due to the rise in oil and gas prices.

“The increase in exports of goods from the region during 2021 is mainly explained by the increase in prices of basic products, especially minerals, oil and agro-industrial products, more than by the expansion of the exported volume. Likewise, regional service exports have not yet recovered from the drop suffered as a result of the pandemic,” the report shows.

Tourism

According to the commission, the dependence of the region's countries on tourism exceeds the world average and causes the uncertainty regarding the reopening of the sector to negatively affect the prospects of several economies, especially the Caribbean countries.

“This situation calls for a reflection on the urgency of deepening regional economic integration. Advancing towards an integrated regional market is essential not only to generate efficient production scales and promote productive and export diversification processes, but also to achieve greater autonomy in strategic sectors. This last objective has acquired particular relevance given the disturbances caused by the pandemic in the world supply chains”, highlighted the executive secretary Alicia Bárcena in the presentation of the document.

uncertainties

The ECLAC report indicates several factors of uncertainty in world trade with consequences in the region, such as the uneven pace of vaccination and new strains of the virus; inflationary pressures and difficulty in maintaining fiscal stimulus; commercial tensions and risks in China's real estate sector; disruptions in supply chains and increased freight rates.

*With information from CEPAL.

Text translated using artificial intelligence.