The vice president of the World Bank for the region, Carlos Felipe Jaramillo, explained that before the outbreak of this conflict, the forecast was that the average level of poverty -below the threshold of 5.5 dollars a day- would fall two points this year, but the belligerance and its effects on the prices of food and energy products project several scenarios, depending on how long that situation lasts, which is very bad news, he said.
The World Bank representative highlighted the high probability of a drop in the growth rate for this year due to the war in that nation, which was between 2.5 and 3 percent, in addition to greater concerns about inflation.
Jaramillo indicated that countries will also have to deal with high levels of indebtedness inherited from the pandemic, a situation that will generate serious difficulties for the region, especially in the Caribbean, due to its dependence on tourism, highly affected by the Covid-19 crisis and which has not yet recovered its pre-pandemic levels.
In this scenario, he warned that the war in Ukraine will generate greater pressure on inflation, especially in fuel and food, in addition to the increase in interest rates in several international economies, which can cause a flight of capital from the region and decrease its room for manoeuvre.
He also highlighted that another of the problems for Latin America is its low productivity and dependence on raw materials, which would explain a large part of its negligible growth rates in recent years.