The Dominican Republic, among the Latin American countries whose economy is better prepared for 2022


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The outlook, however, may vary depending on uneven progress in immunization processes and the ability of countries to reverse the structural problems behind the low growth trajectory they displayed prior to the pandemic.

Santo Domingo.- As 2020 has been so difficult for global economies due to the effects of the covid-19 pandemic, the growth rates for this about to end are misleading.

Indeed, as the current gross domestic product (GDP) is measured against the previous year, it seems at first glance that Latin America has made a spectacular leap.

But the truth is, this is a “rebound effect” because the basis for comparison is very low. So, looking towards the following year, the projections of international organizations give a slightly more “realistic” picture of the evolution of the different countries.

If it’s all about economic growth, the economies with the best prospects for next year are Panama, the Dominican Republic, El Salvador and Peru, according to the latest forecasts from the Economic Commission for Latin America ( CEPALC).

The following table presents the list of countries included in the agency’s studies.

The outlook, however, may vary depending on “uneven progress in immunization processes and the ability of countries to reverse the structural problems behind the weak growth trajectory they exhibited before the pandemic,” the agency said in its “Economic Survey of Latin America and the Caribbean” published in October.

Inflation

Most governments have tried to counter the inflationary wave by raising interest rates, a problem that also affects consumers as credit becomes more expensive.

In part, the rise in inflation is due to rising food prices, wrote Maximiliano Appendino, an economist in the Regional Studies Division of the Western Hemisphere Department of the International Monetary Fund, IMF.

There is a great deal of uncertainty in the environment regarding raw material prices, bottlenecks in supply chains and increasing shipping costs, in addition to the possibility that new variants appear that worsen the covid -19 pandemic.

On the other hand, Appendino added, the region must balance an uncertain inflation outlook with employment, which “is still significantly below pre-pandemic levels.”

Interest rate risk

The best rating is Aaa on a decreasing scale, and the lowest is C. According to Moody’s, the following list ranks countries from best to worst.

Low credit risk

Chile (A1)

Moderate credit risk

Mexico (Baa1)

Peru (Baa1)

Colombia (Baa2)

Panama (Baa2)

Uruguay (Baa2)

Questionable credit quality

Paraguay (Ba1)

Guatemala (Ba1)

Brazil (Ba2)

Dom. Rep. (Ba3)

Honduras (B1)

Costa Rica (B2)

Bolivia (B2)

Nicaragua (B3)

El Salvador (Caa1)

Ecuador (Caa3)

Argentina (Ca)

Cuba (Ca)

Venezuela (C)

Source: Moody’s (December 2021).

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